Agenda Document Pack - Risk and Audit Scrutiny Committee - 18/02/2025
South Lanarkshire Council · 18 February 2025
Back to Risk and Audit Scrutiny Committee — 18 February 2025 and its agenda
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Council Offices, Almada Street Hamilton, ML3 0AA Monday, 10 February 2025 Dear Councillor Risk and Audit Scrutiny Committee The Members listed below are requested to attend a meeting of the Committee to be held as follows:- Date: Tuesday, 18 February 2025 Time: 10:00 Venue: Hybrid - Committee Room 1, Council Offices, Almada Street, Hamilton, ML3 0AA The business to be considered at the meeting is listed overleaf. Please note that, following this meeting of the Risk and Audit Scrutiny Committee, there will be a Members’ Awareness Session on the Risk and Audit Scrutiny Committee Yours sincerely Paul Manning Chief Executive Members Elaine McDougall (Chair), Mary Donnelly (Depute Chair), Mathew Buchanan, Colin Dewar, Alistair Fulton, Ross Gowland, Celine Handibode, Susan Kerr, Richard Lockhart Substitutes Monique Equi, Gavin Keatt, Julia Marrs, Helen Toner 1
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BUSINESS 1 Declaration of Interests 2 Minutes of Previous Meeting Minutes of the meeting of the Risk and Audit Scrutiny Committee held on 19 November 2024 submitted for approval as a correct record. (Copy attached) 5 - 8 Item(s) for Decision 3 Good Governance Update and Significant Governance Areas Quarter 2 Progress Report Report dated 30 January 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 9 - 50 4 2025/2026 Internal Audit Plan Report dated 27 January 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 51 - 72 Item(s) for Noting 5a South Lanarkshire Council Annual Audit Plan 2024/2025 Report dated February 2025 by Audit Scotland, External Auditors. (Copy attached) 73 - 94 5b South Lanarkshire Council Charitable Trusts Annual Audit Plan 2024/2025 Report dated February 2025 by Audit Scotland, External Auditors. (Copy attached) 95 - 110 6 Global Internal Audit Standards Report dated 28 January 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 111 - 120 7 Internal Audit Activity as at 24 January 2025 Report dated 24 January 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 121 - 128 8 Fraud Statistics Six Monthly Update 2024/2025 Report dated 22 January 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 129 - 132 9 Performance and Review Scrutiny Forum - Annual Update for 2024 Report dated 28 January 2025 by the Chief Executive. (Copy attached) 133 - 136 10 Forward Programme for Future Meetings Report dated 13 January 2025 by the Executive Director (Finance and Corporate Resources). (Copy attached) 137 - 140 2
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Urgent Business 11 Urgent Business Any other items of business which the Chair decides are urgent. Clerk Name: Elizabeth-Anne McGonigle Clerk Telephone: 07385403101 Clerk Email: elizabeth-anne.mcgonigle@southlanarkshire.gov.uk 3
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RISK AND AUDIT SCRUTINY COMMITTEE Minutes of meeting held via Confero and in Committee Room 1, Council Offices, Almada Street, Hamilton on 19 November 2024 Chair: Councillor Mary Donnelly (Depute) Councillors Present: Councillor Alistair Fulton, Councillor Ross Gowland, Councillor Susan Kerr, Councillor Richard Lockhart Councillors' Apologies: Councillor Mathew Buchanan, Councillor Celine Handibode, Councillor Cal Johnston-Dempsey, Councillor Elaine McDougall (Chair) Attending: Finance and Corporate Resources J Taylor, Executive Director; Y Douglas, Audit and Compliance Manager; E-A McGonigle, Administration Adviser; A Norris, Administration Assistant; L O’Hagan, Head of Finance (Strategy); I Strachan, Head of Administration and Legal Services Also Attending: Audit Scotland A Barclay, External Auditor 1 Declaration of Interests No interests were declared. 2 Minutes of Previous Meeting The minutes of the meeting of the Risk and Audit Scrutiny Committee held on 24 September 2024 were submitted for approval as a correct record. The Committee decided: that the minutes be approved as a correct record. 3 Internal Audit Activity as at 31 October 2024 A report dated 1 November 2024 by the Executive Director (Finance and Corporate Resources) was submitted on work completed by Internal Audit during the period 31 August to 31 October 2024. Findings from internal audit assignments were reported to this Committee throughout the year and the last progress report was considered by this Committee on 24 September 2024. Information was provided for Internal Audit work completed during the period 31 August to 31 October 2024. As at 31 October 2024, 89% of the 2024/2025 Audit Plan was in progress. Of the 89% of assignments started, 32% related to assignments that were delivered over the course of the year. Assignments completed in the period 31 August to 31 October 2024, together with a summary of overall assurances, were detailed in Appendix 1 to the report. Key performance indicators for the period to 31 October 2024 were included in Appendix 2 to the report. 2 5
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The Internal Audit function within the Council was required to comply with the Public Sector Internal Audit Standards (PSIAS) in the delivery of the service. From April 2025, those Standards would be replaced by the Global Internal Audit Standards (UK Public Sector). The new Standards would have 2 elements:- the Global Internal Audit Standards (GIAS) an Application Note: GIAS in the UK Public Sector which would be supplemented by a Chartered institute of Public Finance and Accountancy (CIPFA) Code of Practice on the Governance of Internal Audit in Local Government A brief overview of the new Standards was provided in paragraphs 5.2 to 5.7 of the report. A separate report on the new Standard, Application Note and Code of Practice would be presented to the Committee in February 2025. Work had commenced on the Internal Audit Plan 2025/2026 and information was provided at section 6 of the report. Consultation exercises involving the Council Resources and External Audit were being progressed and would be concluded by the end of the calendar year. Once the consultation process was concluded, the comprehensive list of audits would be risk assessed and an Audit Plan would be presented to the Committee for approval. An update was also provided on progress against the Audit Strategy which was a requirement of the PSIAS. Delivery of the 2024/2025 Strategy would be evidenced by the completion of the Internal Audit Plan in year, and monitored during the year by performance indicators which were regularly reported to the Committee. The Committee decided: that progress on Internal Audit activity be noted. [Reference: Minutes of 24 September 2024 (Paragraph 7)] 4 Audit Scotland – Transformation in Councils A report dated 28 October 2024 by the Executive Director (Finance and Corporate Resources) was submitted providing a summary of the information contained within the Audit Scotland ‘Transformation in councils’ report. In October 2024, Audit Scotland published a report entitled ‘Transformation in councils’ on behalf of the Accounts Commission. The Audit Scotland report was part of a series of outputs produced by the Accounts Commission that provided an independent overview of the local government sector. The report had been structured as follows:- Key messages Commission expectations Introduction Part 1 – Council’s must transform to become financially sustainable Part 2 – Urgent action was required to progress transformation The introduction and key messages from the Audit Scotland report were fully detailed in section 4 of the report. The Council’s position in relation to the key messages in the Audit Scotland report and its progress in relation to transformation were detailed in section 5 of the report. 6
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Members expressed appreciation of the work undertaken by the Executive Director (Finance and Corporate Resources) and Finance colleagues, particularly the regular briefings on the financial challenges faced and the innovative solutions that had been presented in relation to savings. The Chair advised that she had spoken to the Executive Director (Finance and Corporate Resources) in relation to offering a members’ session. The Committee decided: (1) that the key messages from the Audit Scotland ‘Transformation in Councils’ report, as detailed in section 4 of the report, be noted; and (2) that the Council’s position in relation to those key messages, as detailed in section 5 of the report, be noted. 5 Forward Programme for Future Meetings A report dated 1 November 2024 by the Executive Director (Finance and Corporate Resources) was submitted on the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 9 December 2025. As part of future arrangements, members were invited to suggest topics for inclusion in the Committee’s forward programme. The Committee decided: that the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 9 December 2025 be noted. [Reference: Minutes 24 September 2024 (Paragraph 11)] 6 Urgent Business There were no items of urgent business. 7
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 18 February 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Good Governance Update and Significant Governance Areas Quarter 2 Progress Report 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] provide an update on the Council’s annual governance arrangements [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- [ (1) that the findings from the annual compliance check against the Local Code of Corporate Governance be noted; (2) that the updated Local Code of Corporate Governance in Appendix 2 be approved; and (3) that progress against the significant governance areas in Appendix 3, being those areas identified within the Annual Governance Statement 2023/2024, be noted. 3. Background 3.1. Each year the Council undertakes a comprehensive review of the governance arrangements that are required to support the Council’s financial and operational controls. The annual review of governance arrangements informs the Governance Statement which is included within the Council’s Annual Accounts. 3.2. On 1 April 2016, a governance framework came into effect, Delivering Good Governance in Local Government and the guidance for Scottish Local Authorities was published in December 2016. This framework was established by the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE). 3.3. To achieve good governance, the Council should be able to demonstrate that its governance structures comply with the principles contained in the CIPFA/SOLACE framework (referred to as ‘the framework’ from here on) and should, therefore, develop and maintain a Local Code of Governance and governance arrangements reflecting these principles. A Local Code of Corporate Governance was developed and approved by the Council on 16 May 2018 and this is reviewed, updated and re- published annually. Compliance with the Code is also reviewed as part of the annual review of governance arrangements. 3.4. On 19 June 2019, the Risk and Audit Scrutiny Committee approved a revised reporting process which is as follows:- 3 9
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Governance Statement - Significant Governance Areas These are areas that have a significant impact on the Council’s governance arrangements. A position statement giving progress against these areas will be provided with the report on the review of the Local Code of Corporate Governance at the end of Quarter 2; and at Quarter 4 with the Governance Statement to the Risk and Audit Scrutiny Committee. Director’s Statement of Assurance - Resource Level Areas for Improvement These are actions approved by each Director in their Statement of Assurance. Progress will be monitored by Resources and reported through the Resource/Service Planning process at Quarter 2 and Quarter 4. 3.5. The purpose of this report is to advise the Committee of the findings from the annual compliance check against the Local Code of Corporate Governance; the outcome of the review of the Code and the updated document; and an update on progress against the significant governance areas highlighted in the 2023/2024 Annual Governance Statement. 4. Findings from the Annual Compliance Check against the Code 4.1. The Council annually reviews the effectiveness of its governance arrangements. There are a few key sources of assurance that inform this review; however, the main purpose of the Annual Governance Statement is to explain how the Council has complied with the principles in its Code and provide assurance as to how these are met. 4.2. The principles in the Code underpin the process for the annual review of governance arrangements and there is a strong golden thread running through the key documents in this process: The Resource/Corporate Self-Assessments; the Director’s Statements of Assurance; and the Governance Statement. 4.3. The table at Appendix 1 has been extracted from the 2023/2024 Annual Governance Statement and shows the significant elements of the systems and processes that comprise the Council’s governance arrangements and important changes/developments. This section of the statement shows how the Council has complied with its Code. 5. Annual Review of the Code 5.1. As part of the evaluation of the annual review of governance arrangements, an annual review of the Code is carried out. The Code is updated with any changes to the approach the Council uses to review its governance arrangements and it is compared with the corporate annual self-assessment and updated as required. 5.2. The revised Code is attached at Appendix 2 and has been amended as follows:- The introduction sets out the purpose and key elements of the code. Following updates last year, which were to provide additional information on how the Code fits in with the annual review of governance arrangements, no amendments have been made to this section. Section 1 outlines the actions and behaviours that demonstrate good governance as set out in the National Framework. Following updates last year, which were to align the principles contained in the Code with the Council’s values, no amendments have been made to this section. Section 2 provides links to the policies, procedures and other documentary evidence that demonstrate the Council’s governance arrangements. This section 10
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has been updated with a small number of changes identified through the 2023/2024 corporate governance self-assessment and annual review. 5.3. Subject to the Committee’s approval, the updated Code will be uploaded to the Council’s website. 6. Significant Governance Areas 6.1. Progress on the significant governance areas highlighted within the Annual Governance Statement 2023/2024 is attached at Appendix 3. 7. Communication of the Code 7.1. The Good Governance Learn on Line course was reviewed in late 2019 and republished in March 2020. 7.2. The revised Code is published annually alongside other key governance documents on the governance information pages on the Council’s website. 8. Employee Implications 8.1. There are no employee implications directly associated with this report8. Officers will continue to attend the Good Governance Group and will commit time to review and monitor governance and assurance arrangements. 9. Financial Implications 9.1. There are no financial implications directly associated with this report. 10. Climate Change, Sustainability and Environmental Implications 10.1. There are no implications for climate change, sustainability or the environment in terms of the information contained within this report. 11. Other Implications 11.1. There are no significant risk issues associated with this report. 12. Integrated Impact Assessment and Consultation Arrangements 12.1. All Resources, through senior officers, are involved in the progress, monitoring and review of governance good arrangements and the development of the Annual Governance Statement and Improvement Plan. 12.2. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no impact assessment is required. Jackie Taylor Executive Director (Finance and Corporate Resources) 30 January 2025 Link(s) to Council Values/Priorities/Outcomes All Council values/priorities/outcomes. Previous References Risk and Audit Scrutiny Committee - “Good Governance Statement 2023/2024 and Q4 Progress” - 25 June 2024 11
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List of Background Papers None Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Iain Strachan, Head of Administration and Legal Services Ext: 4516 (Tel: 01698 454658) Email: iain.strachan@southlanarkshire.gov.uk 12
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Appendix 1 Principle A: Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law Links to Council’s values: • Accountable, effective, efficient, and transparent; Working with and respecting others How we do this: • The Council’s values and objectives provide clear direction to councillors and employees and are embedded in all policies and processes. • Standards of conduct and integrity were promoted through the national Code of Conduct for Councillors and by the Standards and Procedures Advisory Forum. This is supplemented by role profiles which have a core accountability to maintain the highest standards of conduct. • The employee Code of Conduct outlines standards of conduct and integrity. All breaches including reported cases of suspected unethical behaviour and non-compliance with the law/policy were investigated through the employee disciplinary process and the recommended actions taken. • Professional Codes of Conduct ensured that ethical standards were maintained, and all breaches were investigated by the governing body. • To support integrity in decision making, the Council has a number of Committee procedural documents including decision making protocols known as the Scheme of Delegation, terms of reference documents, standing orders on procedures and contracts and financial regulations. • To ensure openness and transparency agendas and Committee reports are published to the council website at least five working days ahead of the scheduled meeting dates and any minutes of decisions taken by the Chief Executive during any period when committee meetings are suspended are publicised on the Council website. Committee meetings are live streamed to the Council’s YouTube channel. • To ensure openness and transparency in decision making processes, all declarations of interest made by councillors at meetings were recorded and made available online. • There are a range of policies such as the Counter Fraud, Bribery and Corruption Policy Statement and Strategy, Fraud Response Plan, Whistleblowing for Third Parties and Confidential Reporting procedures. These continue to be updated to reflect best practice and support a culture of ethical behaviour amongst employees and councillors. • Health and Safety compliance during 2023/2024 was assessed as being within the top rating band of “good”. • Legal Services maintained an overview of legislation and regulations and worked with services to ensure compliance. Principle B: Ensuring openness and comprehensive stakeholder engagement Links to Council’s values: Accountable, effective, efficient, and transparent; Fair, open, and sustainable; Focused on people and their needs; Working with and respecting others How we do this: • To ensure transparency and openness in decision making processes, all agendas, reports, and decisions were published on the Council’s website and printed copies were available for public inspection for all Committee and Forum meetings (except the Standards and Procedures Advisory Forum). From April 2021 all Committee meetings were live streamed 3 13
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to the Council’s YouTube channel http://bit.ly/SL_Committees. From August 2021 all Forum meetings have been live streamed. • The Committee Management Information System allows members of the public to register and be notified when Committee and forum papers are published. The system also facilitates the creation of online petitions to increase the potential reach of signatories. • The work of the Council and key information from our partners is communicated regularly using a range of communication channels. The South Lanarkshire View pages on the Council website provide a dedicated source of local information and news for communities. A variety of social media channels are used to communicate updates and share information. • A ‘Let’s Talk South Lanarkshire’ campaign has been established and was used to engage local people in an initial discussion about their experiences of the pandemic and continues to be used for ongoing dialogue with communities on both the Council and community planning priorities. • The Council’s Community Engagement Team continue their work to increase stakeholder engagement and involvement in decision making processes through the continued development of new Community Planning Partnership Neighbourhood Plans which are aimed at improving outcomes and reducing inequalities. • The Community Planning Partnership published its first Community Participation and Engagement Strategy 2020 to 2025 which is also available online in BSL and the Council has produced an online course for employees to complement this. • A partnership Participation and Engagement Group has been established to ensure that there is a consistent and co-ordinated approach to engaging with communities. • The Council carried out circa 50 surveys and engagement activities with residents, employees, and partners, and through the council’s Citizens Panel to inform policy and service delivery. Further information on our surveys is published on the Council’s website. • To ensure inclusivity and help shape service delivery, the Council co-ordinates regular engagement with targeted groups of people such as young people, older people, people with disabilities, unpaid carers, black and ethnic minorities, etc. Groups considered items such as the budget consultation, rent setting and performance reporting. • The Participation Requests and Community Asset Transfer processes support communities to engage with the Council to improve local outcomes. • The Council’s performance Spotlights summarise what the Council has achieved and the Public Performance Reports provide a comprehensive overview of service performance. These, along with the council’s Benchmarking report demonstrate the Council’s commitment to continuous improvement and achieving Best Value; summarise the progress that the council has made in meeting its priorities and how it is performing locally and nationally. • The Council’s Digital Strategy 2022 to 2027 sets out the overall approach to digital for the Council. A key objective within the strategy is to assist those people who are unable to get online to access services digitally. The Council also leads on the Digital Inclusion Sub Group, which reports into the Community Planning Partnership. • A comprehensive range of information on how the Council operates is available on the website. The Freedom of Information Publication Scheme ensures that key information about how the council works is accessible to the public. Principle C: Defining outcomes in terms of sustainable, economic, social, and environmental benefits Links to Council’s values: Accountable, effective, efficient, and transparent; Fair, open, and sustainable; Focused on people and their needs How we do this: 14
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• The Council has a Capital Strategy that has a long-term ambition on future capital investment (up to 2027/2028) and a capital programme agreed for 2024/25. This document is underpinned by a suite of Asset Management Plans which are aligned with the council’s objectives and focus on creating an efficient, fit-for-purpose and sustainable core estate that delivers best value in terms of investment, running costs and environmental impact. • The Council Plan 2022 to 2027 and Community Plan 2022 to 2032 have clearly defined economic, social, and environmental outcomes to be delivered during the period. • A Community Wealth Building Strategy setting out the Council’s ambitions in relation to spending, workforce, land and property, finance and building the generative economy was approved in March 2021. A Community Wealth Building Commission was established to oversee the implementation of the Strategy, with the Commission receiving an annual report on progress. A Community Wealth Building Progress Group has been set up to ensure that timescales within the action plan are met. • The CWB Strategy is supported by an action plan which is reviewed annually, with progress reported to the Commission at Q2 and Q4 via the council’s Improve system. • Annual Resource Plans which deliver the objectives of the Council Plan were reviewed and updated. These plans outline the outcomes and actions to be achieved within the year and reference linkages with other key strategic plans of the Council and partnership plans. • The Sustainable Development and Climate Change Strategy 2022-27 was approved by the Council in June 2022 and which sets out the Council’s strategic vision ,themes and priorities in terms of the Council, environment and communities for sustainable development and climate change during the period was developed using the principles of the United Nation’s Sustainable Development Goals and to reduce the council’s contribution to global warming. • The Council’s Climate Change and Sustainability Committee oversees the delivery of the Sustainable Development and Climate Change Strategy 2022-2027,the Council’s transition to carbon neutrality and climate resilience. • The Council’s Procurement Strategy 2023-28 which is complemented by an annual action plan, sets out how value for money, national and local priorities will be delivered. It also demonstrates how the Council will deliver the wider social, economic, and environmental aims of procurement as required by the sustainable procurement duty. • Sustainability principles are embedded in procurement processes and in recognition of the importance of our suppliers in achieving the Council’s aim to become more sustainable. • Strategic Environmental Assessments (SEAs) were completed for all relevant Council led policies, plans and strategies developed during 2023/2024. • The South Lanarkshire Local Development Plan 2 was adopted by the Council on 9 April 2021. The spatial strategy of the plan is to encourage sustainable economic growth and regeneration, a move towards a low carbon economy, protect the natural and historic environment and mitigate against the impacts of climate change. • A summary of the findings resulting from Equality Impact Assessments of the Council’s key decisions on service users, communities and businesses have been published on the Council’s website. • Strategic decisions of the Council have been subject to a Fairer Scotland Impact Assessment which considers how inequalities of outcome can be reduced. Principle D: Determining the interventions necessary to optimise the achievement of the intended outcomes Links to Council’s values: Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving; Focused on people and their needs; Working with and respecting others How we do this: • There has been a programme of transformational reviews undertaken over recent years to identify savings and help manage balancing the Councils budget. This programme is overseen by the Senior Management Team. Frameworks are in place for holding 15
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discussions with key stakeholders. Savings achievements are monitored monthly and reported to the Senior Management Team quarterly. • The Financial Strategy which is aligned with the Council’s objectives was updated during the year to reflect the latest internal and external influences. This plan sets out the assumptions in terms of commitments, grant funding and efficiency requirement and demonstrates sound financial management and the ability to address projected funding gaps. • The annual budget setting consultations took place with members of the public, groups and the Council’s partners in order to inform the budget process. The annual budget is open to scrutiny and amendment by councillors until the approval of the final budget. • The Council’s Performance Management Framework has ensured that progress against intended outcomes has been regularly reported to Management Teams; Committees; and the Performance and Review Scrutiny Forum. Decisions and actions to address performance issues have been taken and monitored to ensure that they have been effective. • The Council has complied with its statutory and regulatory reporting requirements during the year. • The Public Bodies (Joint Working) (Scotland) Act 2014 sets out those Adult Care Services that are delegated to the Integration Joint Board (IJB) as set out in the South Lanarkshire Health & Social Care Integration Scheme. These services continue to be operationally delivered by the Council in line with the strategic direction set out in the Strategic Commissioning Plan and IJB Directions. • The Council considers the specification and achievement of community benefits, which focus on the health, economic, social, and environmental wellbeing of the South Lanarkshire area, when awarding contracts. • To improve efficiency and effectiveness, the Council is the lead authority for a range of collaborative projects and services delivered through the Clyde Valley Learning and Development Group. We also work closely with, and share services with partners including SLLC, IJB and Seemis. Principle E: Developing the entity’s capacity, including the capability of its leadership and the individuals within it Links to Council’s values: Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving; Excellent employer; Focused on people and their needs; Working with and respecting others How we do this: • A Leadership Challenge Programme which is linked to succession planning was rolled out during 2023-24, and this is continuing. • Learning and Development programmes were revised and employees at all levels can now access optional accredited management qualifications. • Training requirements were identified and online learning and development opportunities including webinars and e-briefings were developed and offered to all councillors. • Feedback from 2022 survey on working from home/hybrid working is used to inform agile working arrangements. • A range of policies and activities are in place to support the Health and Wellbeing of employees including physical and mental health and these have been regularly communicated. Online wellbeing events were held in response to the new ways of working. • The Council recognises that skilled and motivated employees are a key asset. All employees have an annual performance appraisal which links to the Council values and a Personal Development Plan. The council offers a range of training interventions to support employee development. • The Council has a comprehensive and coordinated approach to workforce planning which also supports succession planning. Each Resource reviews their workforce plan and related 16
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action plan to better understand workforce capacity issues, further challenges, and opportunities to ensure that resources are in the right place, at the right time and people have the right skills. The Council-wide Workforce plan has been revised to consider the workforce requirements as a result of the pandemic response. • Senior Managers have overseen the annual scrutiny of the Council’s assets through the review of a suite of Asset Management Plans. Service Asset Management Plans have been developed in line with CIPFA guidance and these feed into the Corporate Asset Management Plan which outlines priorities and provides an overview of how the Council has performed in this area. • The Council’s Scheme of Delegation, Financial Regulations, Standing Orders on Contracts and Terms of Reference ensured that Committees, officers, and statutory officers were clear on the decisions that could be made within their area of authority. This is supplemented by councillor’s role profiles which outline the key purpose, specific and core accountabilities for each role. • The Council continues to work with a range of public sector, business, and academic partners to improve outcomes for those living and working in South Lanarkshire. Strategic Partnerships include the Community Planning Partnership and the Glasgow City Region City Deal. • Local Government Benchmarking Framework (LGBF) results continue to be reported to the Performance Review and Scrutiny Forum, containing all LGBF indicators. As other reporting arrangements mature, the scale of this report may be reduced and the strategic suite of indicators aligned to Council Plan outcomes are featured in an appendix to the Council Plan Q4 report, giving an opportunity to assess the Council’s performance over time and comparative performance in the context of the Council Plan priorities. • Further LGBF indicators will feature in the Council’s public performance reporting, both in the Annual Performance Spotlights and in the PPR pages on the website. These are topic- based and place the LGBF information in a richer context than is possible in the annual LGBF report. The results are analysed and an action plan developed which will be monitored by the Senior Management Team. • To complement this work, an LGBF dashboard has been developed to provide easy access to the LGBF indicators and the narrative that sits alongside them. The dashboard shows time trends for each of the strategic indicators aligned with the council plan outcomes and provides charts comparing SLC performance with both the Scottish and the family group average. • The Council takes a risk-based approach to self-assessment which is used to review and redesign services with a focus on fundamental change. Progress and the impact of improvement activity was reported to the Senior Management Team and the Performance and Review Scrutiny Forum. • The Council has a robust complaints process which is underpinned by national complaints handling standards. Complaints performance was regularly reported to Senior Management and Committee and learning from complaints which is integral to this process is also published on the Council’s website. Complaint handling procedures have been updated in line with national changes and communicated to all employees. Principle F: Managing risks and performance through robust internal control and strong public financial management Links to Council’s values: Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving How we do this: • The Council, in partnership with Trade Unions, ensured that safe systems of work were in place through a robust risk assessment process, changes to working methods and supply of personal protective equipment. 17
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• The Council has put in place comprehensive arrangements for identifying, evaluating, and controlling significant risks which threaten the council’s ability to meet its objectives to deliver services to the public. There is also a robust process in place for compliance monitoring of the Council’s Risk Management Strategy, Resource Risk Registers and Control Plans. • The annual end of year compliance statement evidenced that all Resources were compliant with Risk Management Strategic requirements. • The Council’s risk scoring matrix was revised as an outcome of the 2021/2022 annual review of risks. • The Council’s Internal Audit Service which complies with Public Sector Internal Audit Standards completed an annual programme of risk-based audits with an objective of providing an opinion on the adequacy and effectiveness of the Council’s risk management, governance, and internal control arrangements. Where improvements were required, action plans were developed and monitored and where necessary follow-up audit work completed. • In response to changes in working practices and the introduction of new systems, Internal Audit has advised on key internal controls that should be maintained. • The Information Governance Board is reasonably satisfied that Resources have followed the Information Governance operational arrangements to promote effective arrangements for the safe collection, storage, use and sharing of data, including processes to safeguard personal data, but this will be the subject of further work in 2024/25. • Information security incidents have continued to be monitored and considered for notification to the Information Commissioner’s Office. Throughout the period, the Council’s Data Protection Officer provided advice and assistance to Resources in relation to meeting their obligations under UK General Data Protection Regulations (GDPR). • The system of internal financial control is based upon the Financial Regulations which set out the rules to ensure robust internal control over the council’s finances. Control is maintained through regular management information, management supervision and a structure of delegation and accountability. • External Audit of the Council’s accounts is robust and a “clean audit certificate” was issued for 2022/2023. • Through a well-established Performance Management Framework, the Council has clearly defined processes in place for the identification, monitoring, and reporting of its objectives to ensure continued effectiveness and the achievement of Best Value. Progress is monitored and reported regularly to both managers and councillors. This includes areas of under-performance and the related improvement actions. • Trustees of the South Lanarkshire Charitable and Educational Trusts received independent legal training setting out their duties and responsibilities in ensuring that the trusts operate in a manner designed to benefit communities. • The Executive Director of Finance and Corporate Resources is a member of the Council’s Senior Management Team and as such, is integral in all major decisions taken by the Council, and in material matters which are submitted to councillors for decision. This involvement fulfils the expectation of CIPFA in terms of the role of the Chief Financial Officer. • The Council previously completed a self-assessment using the principles of the CIPFA Financial Management Code. Our existing financial management controls and measures continue to provide comfort on the Council’s financial management and resilience. This includes the preparation of a medium term strategy presented to members regularly as part of the annual budget process, providing members with the information required to assist budget planning. Principle G: Fair, Open and Sustainable; Implementing good practices in transparency, reporting, and audit to deliver effective accountability Links to Council’s values: Accountable, effective, efficient, and transparent; Ambitious, self-aware, and improving; Working with and respecting others 18
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How we do this: • The Good Governance Group has completed the annual review of governance arrangements at resource level and in line with the CIPFA/SOLACE Delivering Good Governance Framework. Governance improvement actions have also been identified and are included in Resource/Service Action Plans. Progress against actions including those highlighted as significant governance areas for action will be reported to the Senior Management Team and Committee. • In the 2022/2023 annual audit report, the external auditor reported that the Council had in place appropriate arrangements to support good governance and accountability and they were of the view that governance arrangements remained effective in 2022/23. • All Directors completed their annual Statement of Assurance and relevant assurances have been provided. • The Council prepares and publishes an Annual Governance Statement which is aligned with national guidance and reflects on the adequacy and effectiveness of the Council’s governance arrangements. This is independently considered by External Audit and published with the Annual Accounts and separately on a dedicated governance web page. • The annual review of governance arrangements for the Council’s at Arm’s Length External Organisations (ALEOs) and key external service providers has not highlighted any compliance issues. • The annual review of the Local Code of Corporate Governance was completed, and the revised Code was approved by Committee in March 2024 and re-published on the Council’s website. • all agendas, reports and decisions continue to be published (except those exempt under the Local Government (Scotland) Act 1973) on the Council’s website. All Committee and Forum meetings are livestreamed to the Council’s YouTube page http://bit.ly/SL_Committees. • The Risk and Audit Scrutiny Committee considered the adequacy and effectiveness of the Council’s governance arrangements and internal control environment and approved the Annual Governance Statement and Accounts. • Internal audit activity has continued to be reported to the Senior Management Team and to the Risk and Audit Scrutiny Committee. • Outcomes from external audit and inspection activity was reported to the appropriate Committee and action plans were developed for implementation where required. 19
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Appendix 2 Local Code of Corporate Governance Introduction 1. What is Corporate Governance? South Lanarkshire Council has set the framework for strong Corporate Governance by having a clear vision which states that the council will:- “Improve the lives and prospects of everyone in South Lanarkshire” The function of good governance in the public sector is to ensure that organisations achieve their intended outcomes while acting in the public interest at all times. This means doing the right things, in the right way, for the right people, at the right time, in an inclusive, open, honest and accountable manner. 2. Purpose This document sets out South Lanarkshire Council’s Local Code of Corporate Governance which has been produced in accordance with the principles and requirements contained within the framework established by the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE) in the publication, Delivering Good Governance in Local Government Framework (2016 Edition) (referred to as “The Framework” from here on). It comprises of a framework of policies, procedures, behaviours and values by which the council is controlled and governed. It shows how the council will continue to review the governance arrangements that are currently in place and implement improvements where necessary. The Code is split into two sections:- • Section 1 outlines the actions and behaviours that demonstrate good governance as set out in the framework; and • Section 2 provides links to the policies, procedures and other documentary evidence that demonstrate the council’s governance arrangements. These provide the structures and guidance that our councillors and employees need to ensure effective governance across the council. 3. Good Governance in the Public Sector (The Framework) The Framework defines the principles that should underpin the governance of each council and provides a structure to help councils with their approach to governance. Whatever arrangements are in place, councils should test their governance structures and partnerships against the principles contained in the Framework by:- • reviewing existing governance arrangements; • developing and maintaining an up-to-date local code of governance, including arrangements for ensuring ongoing effectiveness; and 3 21
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• reporting publicly on compliance with their own code on an annual basis and on how they have monitored the effectiveness of their governance arrangements in the year and on planned changes. To achieve good governance, each council should be able to demonstrate that its governance structures comply with the principles contained in this Framework. It should therefore develop and maintain a local code of governance/governance arrangements reflecting the principles set out. The diagram below illustrates the seven principles of good governance in the public sector and how they relate to each other:- Further information regarding each of the above principles and the behaviours and actions that demonstrate good governance in practice are detailed at Section 1. 4. Monitoring and Review The council will monitor its governance arrangements for their effectiveness in practice and will review them on a continuing basis to ensure that they are up to date. For more information on how we do this see the council’s Annual Governance Statement which can be found on the governance information page on the council’s website. 5. Compliance with the Code Compliance with the code will be assessed annually using the councils “Governance Assurance Framework”. This will be carried out by a governance working group which is chaired by the council’s monitoring officer and comprises of senior officers from each of the council’s five Resource departments. The Internal Auditor also attends these meetings. The results of the assessment will be reported to the Risk and Audit Scrutiny Committee. This will incorporate recommendations for additions and/or improvements to the code to reflect any 22
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changes in the way in which the council does business or new legislation affecting the council’s governance arrangements. Each year the council will publish an Annual Governance Statement. The Leader of the Council and the Chief Executive are required to produce this as part of the auditing of the council’s annual accounts. The document sets out the following:- • the scope of the council’s responsibility; • the purpose of the council and it’s governance framework; • how the council monitors and evaluates the effectiveness of its governance arrangements; • key elements of the council’s governance framework. This is the main part of the document which sets out how the council has complied with the principles in this code and provides assurance as to how they are met; • provides an opinion on the effectiveness of the council’s arrangements; and • provides details of improvements that have been delivered and are required moving forward. In addition, the council’s Internal Audit team will also conduct an annual independent audit reviewing the adequacy, effectiveness and extent of compliance with the code. 6. Certification The council is committed to the seven principles of good corporate governance detailed within the Framework and demonstrates this commitment through the development, adoption and implementation of a Local Code of Corporate Governance. We hereby certify our commitment to this Code of Corporate Governance and will make sure that the council continues to review, evaluate and develop the council’s governance arrangements to ensure continuous improvement of the council’s systems. Joe Fagan Leader of the Council Signature: Date: Paul Manning Chief Executive Signature: Date: 23
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Section 1 Actions and behaviours that demonstrate good governance in practice Principle A: Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law What this means in practice:- The council are accountable not only for how much they spend, but also for how they use the resources under their stewardship. This includes accountability for outputs, both positive and negative, and for the outcomes they have achieved. In addition, they have an overarching responsibility to serve the public interest in adhering to the requirements of legislation and government policies. It is essential that, as a whole, they can demonstrate the appropriateness of all their actions across all activities and have mechanisms in place to encourage and enforce adherence to ethical values and to respect the rule of law. Links to council’s values: Accountable, effective, efficient and transparent; Working with and respecting others; Fair, open and sustainable Sub principles: South Lanarkshire Council is committed to:- A1: Behaving with integrity Ensuring members and officers behave with integrity and lead a culture where acting in the public interest is visibly and consistently demonstrated thereby protecting the reputation of the council. Ensuring members take the lead in establishing specific standard operating principles or values for the council and its employees and that they are communicated and understood. These should build on the Seven Principles of Public Life (The Nolan Principles). Leading by example and using the above standard operating principles or values as a framework for decision making and other actions. Demonstrating, communicating and embedding the standard operating principles or values through appropriate policies and processes which are reviewed on a regular basis to ensure that they are operating effectively. A2: Demonstrating strong commitment to ethical values Seeking to establish, monitor and maintain the council’s ethical standards and performance. Underpinning personal behaviour with ethical values and ensuring they permeate all aspects of the council's culture and operation. Developing and maintaining robust policies and procedures which place emphasis on agreed ethical values. Ensuring that external providers of services on behalf of the council are required to act with integrity and in compliance with ethical standards expected by the council. A3: Respecting the rule of law Ensuring members and employees demonstrate a strong commitment to the rule of the law as well as adhering to relevant laws and regulations. Creating the conditions to ensure that the statutory officers, other key post holders, and members, are able to fulfil their responsibilities in accordance with legislative and regulatory requirements. Striving to optimise the use of the full powers available for the benefit of citizens, communities and other stakeholders. Dealing with breaches of legal and regulatory provisions effectively. Ensuring corruption and misuse of power are dealt with effectively. 24
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Principle B: Ensuring openness and comprehensive stakeholder engagement What this means in practice:- The council is run for the public good, organisations therefore should ensure openness in their activities. Clear, trusted channels of communication and consultation should be used to engage effectively with all groups of stakeholders, such as individual citizens and service users, as well as institutional stakeholders. Links to council’s values: Accountable, effective, efficient and transparent; Fair, open and sustainable; Focused on people and their needs; Working with and respecting others Sub principles: South Lanarkshire Council is committed to:- B1: Openness Ensuring an open culture through demonstrating, documenting and communicating the council’s commitment to openness. Making decisions that are open about actions, plans, resource use, forecasts, outputs and outcomes. The presumption is for openness. If that is not the case, a justification for the reasoning for keeping a decision confidential should be provided. Providing clear reasoning and evidence for decisions in both public records and explanations to stakeholders and being explicit about the criteria, rationale and considerations used. In due course, ensuring that the impact and consequences of those decisions are clear. Using formal and informal consultation and engagement to determine the most appropriate and effective interventions/courses of action. B2: Engaging comprehensively with institutional stakeholders Effectively engaging with institutional stakeholders to ensure that the purpose, objectives and intended outcomes for each stakeholder relationship are clear so that outcomes are achieved successfully and sustainably. Developing formal and informal partnerships to allow for resources to be used more efficiently and outcomes achieved more effectively. Ensuring that partnerships are based on: trust; a shared commitment to change; a culture that promotes and accepts challenge among partners and that the added value of partnership working is explicit. B3: Engaging with individual citizens and service users effectively Establishing a clear policy on the types of issues that the council will meaningfully consult with or involve individual citizens, service users and other stakeholders to ensure that service (or other) provision is contributing towards the achievement of intended outcomes. Ensuring that communication methods are effective and that members and officers are clear about their roles with regard to community engagement. Encouraging, collecting and evaluating the views and experiences of communities, citizens, service users and organisations of different backgrounds including reference to future needs. Implementing effective feedback mechanisms in order to demonstrate how views have been taken into account. Balancing feedback from more active stakeholder groups with other stakeholder groups to ensure inclusivity. Taking account of the impact of decisions on future generations of tax payers and service users. 25
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Principle C: Defining outcomes in terms of sustainable economic, social, and environmental benefits What this means in practice:- The long-term nature and impact of many of the council’s responsibilities mean that it should define and plan outcomes and that these should be sustainable. Decisions should further the council’s purpose, contribute to intended benefits and outcomes, and remain within the limits of authority and resources. Input from all groups of stakeholders, including citizens, service users, and institutional stakeholders, is vital to the success of this process and in balancing competing demands when determining priorities for the finite resources available. Links to council’s values: Accountable, effective, efficient and transparent; Fair, open and sustainable; Focused on people and their needs; Ambitious, self-aware and improving Sub principles: South Lanarkshire Council is committed to:- C1: Defining Outcomes Having a clear vision which is an agreed formal statement of the council's purpose and intended outcomes containing appropriate performance indicators, which provide the basis for the council’s overall strategy, planning and other decisions. Specifying the intended impact on, or changes for, stakeholders including citizens and service users. It could be immediately or over the course of a year or longer. Delivering defined outcomes on a sustainable basis within the resources that will be available. Identifying and managing risks to the achievement of outcomes. Managing service users' expectations effectively with regard to determining priorities and making the best use of the resources available. C2: Sustainable economic, social and environmental benefits Considering and balancing the combined economic, social and environmental impact of policies and plans when taking decisions about service provision. Taking a longer-term view with regard to decision making, taking account of risk and acting transparently where there are potential conflicts between the council's intended outcomes and short-term factors such as the political cycle or financial constraints. Determining the wider public interest associated with balancing conflicting interests between achieving the various economic, social and environmental benefits, through consultation where possible, in order to ensure appropriate trade-offs. Ensuring fair access to services. 26
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Principle D: Determining the interventions necessary to optimise the achievement of the intended outcomes What this means in practice:- The council achieves its intended outcomes by providing a mixture of legal, regulatory, and practical interventions (courses of action). Determining the right mix of these courses of action is a critically important strategic choice that the council has to make to ensure intended outcomes are achieved. They need robust decision-making mechanisms to ensure that their defined outcomes can be achieved in a way that provides the best trade-off between the various types of resource inputs while still enabling effective and efficient operations. Decisions made need to be reviewed frequently to ensure that achievement of outcomes is optimised. Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving; Focused on people and their needs; Working with and respecting others Sub principles: South Lanarkshire Council is committed to:- D1: Determining interventions Ensuring decision makers receive objective and rigorous analysis of a variety of options indicating how intended outcomes would be achieved and associated risks. Therefore ensuring best value is achieved however services are provided. Considering feedback from citizens and service users when making decisions about service improvements or where services are no longer required in order to prioritise competing demands within limited resources available including people, skills, land and assets and bearing in mind future impacts. D2: Planning interventions Establishing and implementing robust planning and control cycles that cover strategic and operational plans, priorities and targets. Engaging with internal and external stakeholders in determining how services and other courses of action should be planned and delivered. Considering and monitoring risks facing each partner when working collaboratively, including shared risks. Ensuring arrangements are flexible and agile so that the mechanisms for delivering goods and services can be adapted to changing circumstances. Establishing appropriate key performance indicators (KPIs) as part of the planning process in order to identify how the performance of services and projects is to be measured. Ensuring capacity exists to generate the information required to review service quality regularly. Preparing budgets in accordance with objectives, strategies and the medium term financial plan. Informing medium and long-term resource planning by drawing up realistic estimates of revenue and capital expenditure aimed at developing a sustainable funding strategy. D3: Optimising achievement of intended outcomes Ensuring the medium term financial strategy integrates and balances service priorities, affordability and other resource constraints. Ensuring the budgeting process is all-inclusive, taking into account the full cost of operations over the medium and longer term. Ensuring the medium-term financial strategy sets the context for ongoing decisions on significant delivery issues or responses to changes in the external environment that may arise during the budgetary period in order for outcomes to be achieved while optimising resource usage. 27
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Ensuring the achievement of ‘social value' through service planning and commissioning. 28
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Principle E: Developing the entity’s capacity, including the capability of its leadership and the individuals within it What this means in practice:- The council needs appropriate structures and leadership, as well as people with the right skills, appropriate qualifications and mindset, to operate efficiently and effectively and achieve intended outcomes within the specified periods. The council must ensure that it has both the capacity to fulfil its own mandate and to make certain that there are policies in place to guarantee that its management has the operational capacity for the organisation as a whole. Because both individuals and the environment in which an organisation operates will change over time, there will be a continuous need to develop its capacity as well as the skills and experience of individual staff members. Leadership is strengthened by the participation of people with many different types of backgrounds, reflecting the structure and diversity of communities. Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving; Excellent employer; Focused on people and their needs; Working with and respecting others Sub principles: South Lanarkshire Council is committed to:- E1: Developing the entity’s capacity Reviewing operations, performance and use of assets on a regular basis to ensure their continuing effectiveness. Improving resource use through appropriate application of techniques such as benchmarking and other options in order to determine how resources are allocated so that defined outcomes are achieved effectively and efficiently. Recognising the benefits of partnerships and collaborative working where added value can be achieved. Developing and maintaining an effective workforce plan to enhance the strategic allocation of resources. E2: Developing the capability of the entity's leadership and other individuals Developing protocols to ensure that elected and appointed leaders negotiate with each other regarding their respective roles early on in the relationship and that a shared understanding of roles and objectives is maintained. Publishing a statement that specifies the types of decisions that are delegated and those reserved for the collective decision making of the governing body. Ensuring the leader and the chief executive have clearly defined and distinctive leadership roles within a structure whereby the chief executive leads in implementing strategy and managing the delivery of services and other outputs set by members and each provides a check and a balance for each other's authority. Developing the capabilities of members and senior management to achieve effective leadership and to enable the council to respond successfully to changing legal and policy demands as well as economic, political and environmental changes and risks by: • Ensuring members and employees have access to appropriate induction tailored to their role and that ongoing training and development matching individual and council requirements is available and encouraged; • Ensuring members and officers have the appropriate skills, knowledge, resources and support to fulfil their roles and responsibilities and ensuring that they are able to update their knowledge on a continuing basis; and 29
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• Ensuring personal, organisational and system-wide development through shared learning, including lessons learnt from governance weaknesses both internal and external. Principle E: Developing the entity’s capacity, including the capability of its leadership and the individuals within it (continued) Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving; Excellent employer; Focused on people and their needs; Working with and respecting others Sub principles: South Lanarkshire Council is committed to:- E2: Developing the capability of the entity's leadership and other individuals (continued) Ensuring that there are structures in place to encourage public participation. Taking steps to consider the leadership's own effectiveness and ensuring leaders are open to constructive feedback from peer review and inspections. Holding staff to account through regular performance reviews which take account of training or development needs. Ensuring arrangements are in place to maintain the health and wellbeing of the workforce and support individuals in maintaining their own physical and mental wellbeing. 30
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Principle F: Managing risks and performance through robust internal control and strong public financial management What this means in practice:- The council needs to ensure that the organisations and governance structures that it oversees have implemented, and can sustain, an effective performance management system that facilitates effective and efficient delivery of planned services. Risk management and internal control are important and integral parts of a performance management system and are crucial to the achievement of outcomes. Risk should be considered and addressed as part of all decision making activities. A strong system of financial management is essential for the implementation of policies and the achievement of intended outcomes, as it will enforce financial discipline, strategic allocation of resources, efficient service delivery and accountability. It is also essential that a culture and structure for scrutiny are in place as a key part of accountable decision making, policy making and review. A positive working culture that accepts, promotes and encourages constructive challenge is critical to successful scrutiny and successful delivery. Importantly, this culture does not happen automatically, it requires repeated public commitment from those in authority. Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving Sub principles: South Lanarkshire is committed to:- F1: Managing risk Recognising that risk management is an integral part of all activities and must be considered in all aspects of decision making. Implementing robust and integrated risk management arrangements and ensuring that they are working effectively. Ensuring that responsibilities for managing individual risks are clearly allocated. F2: Managing performance Monitoring service delivery effectively including planning, specification, execution and independent post-implementation review. Making decisions based on relevant, clear objective analysis and advice pointing out the implications and risks inherent in the council's financial, social and environmental position and outlook. Ensuring an effective scrutiny or oversight function is in place which provides constructive challenge and debate on policies and objectives before, during and after decisions are made thereby enhancing the council’s performance and that of any organisation for which it is responsible. (Or, for a Committee system - Encouraging effective and constructive challenge and debate on policies and objectives to support balanced and effective decision making). Providing members and senior management with regular reports on service delivery plans and on progress towards outcome achievement. Ensuring there is consistency between specification stages (such as budgets) and post-implementation reporting (e.g. financial statements). F3: Robust internal control Aligning the risk management strategy and policies on internal control with achieving objectives. Evaluating and monitoring risk management and internal control on a regular basis. Ensuring effective counter fraud and anti-corruption arrangements are in place. Ensuring additional assurance on the overall adequacy and effectiveness of the framework of governance, risk management and control is provided by the internal auditor. 31
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Principle F: Managing risks and performance through robust internal control and strong public financial management (continued) Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving Sub principles: South Lanarkshire is committed to:- F3: Robust internal control (continued) Ensuring an audit Committee or equivalent group/function, which is independent of the executive and accountable to the governing body; • provides a further source of effective assurance regarding arrangements for managing risk and maintaining an effective control environment; and • that its recommendations are listened to and acted upon. F4: Managing data Ensuring effective arrangements are in place for the safe collection, storage, use and sharing of data, including processes to safeguard personal data. Ensuring effective arrangements are in place and operating effectively when sharing data with other bodies. Reviewing and auditing regularly the quality and accuracy of data used in decision making and performance monitoring. F5: Strong public financial management Ensuring financial management supports both long-term achievement of outcomes and short-term financial and operational performance. Ensuring well-developed financial management is integrated at all levels of planning and control, including management of financial risks and controls. 32
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Principle G: Implementing good practices in transparency, reporting, and audit to deliver effective accountability What this means in practice:- Accountability is about ensuring that those making decisions and delivering services are answerable for them. Effective accountability is concerned not only with reporting on actions completed, but also ensuring that stakeholders are able to understand and respond as the council plans and carries out its activities in a transparent manner. Both external and internal audit contribute to effective accountability. Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving; Working with and respecting others; Fair, open and sustainable Sub principles: South Lanarkshire Council is committed to:- G1: Implementing good practice in transparency Writing and communicating reports for the public and other stakeholders in a fair, balanced and understandable style appropriate to the intended audience and ensuring that they are easy to access and interrogate. Striking a balance between providing the right amount of information to satisfy transparency demands and enhance public scrutiny while not being too onerous to provide and for users to understand. G2: Implementing good practices in reporting Reporting at least annually on performance, value for money and stewardship of resources to stakeholders in a timely and understandable way. Ensuring members and senior management own the results reported. Ensuring robust arrangements for assessing the extent to which the principles contained in this Framework have been applied and publishing the results on this assessment, including an action plan for improvement and evidence to demonstrate good governance (the annual governance statement). Ensuring that this Framework is applied to jointly managed or shared service organisations as appropriate. Ensuring the performance information that accompanies the financial statements is prepared on a consistent and timely basis and the statements allow for comparison with other, similar organisations. G3: Assurance and effective accountability Ensuring that recommendations for corrective action made by external audit are acted upon. Ensuring an effective internal audit service with direct access to members is in place, providing assurance with regard to governance arrangements and that recommendations are acted upon. Welcoming peer challenge, reviews and inspections from regulatory bodies and implementing recommendations. Gaining assurance on risks associated with delivering services through third parties and that this is evidenced in the annual governance statement. Ensuring that when working in partnership, arrangements for accountability are clear and that the need for wider public accountability has been recognised and met. 33
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Section 2 Policies, Procedures and other documentary evidence Evidence that the council complies with the requirements of the framework (see Section 1) (Link provided where available) Core Principles A B C D E F G Annual Accounts Annual Performance Spotlights Annual Resource budget strategy meeting Fraud management plan and procedures Asset Management Audit Scotland monitoring and reporting process Behaviours Framework/Performance Appraisal Budget Consultations and Savings Plans Business Continuity Plans CEO/Political leaders meetings Codes of Conduct (Link to Councillors Code) Committee Management Procedural Documents Communication plans and strategies Community Engagement and Participation Strategy Community Engagement Partnership Group Community Engagement Team Participation Requests Community Asset Transfer Community Planning Partnership Plans Community Plan Annual Report Complaints Handling; You said, we did Consultation Database Corporate Management Team, Committees and Forums Council Plan – Connect Devolved school management scheme 2022 Digital Communications 34
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Empower Self-Assessment process Equalities/Equality & Diversity Policy Integrated Impact Assessments, including Equality Impact Assessments and Fairer Scotland Duty Impact Assessments Financial Management Evidence that the council complies with the requirements of the framework (see Section 1) (Link provided where available) Core Principles A B C D E F G Financial Regulations Freedom of Information Act Publication Scheme (How the council works) Housing Charter Performance Report Register of Partnerships Induction process/programme Information Governance Data Protection Privacy Impact Assessment Internal Audit Plan Information Security Policy Investors in People Award Learning and Development Programmes Local Code of Corporate Governance Local Government Benchmarking Framework Media and Public Relations Members Role profiles Monitoring Officer provisions Multi-member ward protocol Neighbourhood Planning Officer job description/specifications Participatory Budgeting Partnerships: Glasgow Region City Deal/Clyde Valley 35
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People’s Panel Performance Management Personnel strategies, policies and procedures Health and social care - Planning with People Procurement Public Performance Reports Records Management Plan Records Management Policy Register of gifts and hospitality/Register of Interests Evidence that the council complies with the requirements of the framework (see Section 1) (Link provided where available) Core Principles A B C D E F G Resource Contingency Plans Resource Plans / Health and Social Care Strategic Commissioning Plan Risk and Audit Scrutiny Committee Risk Management Scheme of Delegation Scrutiny Forums Service Review Framework Standards and Procedures Advisory Forum Standing Orders on Procedures / Standing Orders on Contracts Statutory guidance Strategic Environmental Assessments Strategies and Policies Terms of Reference, the Council, Committees and associated forums Whistle blowing policies (link to Third Parties) 36
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Workforce planning 37
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Annual Governance Statement 2023/2024 – Significant Governance Areas Quarter 2 Update No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update 1 Cyber Resilience Compliance with legislative and regulatory policy A programme of actions to maintain cyber security and resilience in 2024/2025 will include: • Refresh/retiral of legacy systems, network equipment and end user devices (mobile phones, PCs) • Programme of security patching of all systems • Compliance with PSN and Cyber Essentials schemes • Incident response • Officer training and awareness (e.g., phishing) • Data security reviews as part of new system installation and security monitoring Executive Director of Finance and Corporate Resources • Refresh programme is ongoing, retiral of legacy systems is monitored and reported on by the IT Security team on a fortnightly basis and to the IT SMT monthly. • Monthly and Quartey patching are scheduled tasks across the estate. • Council is aligned to PSN and Cyber Essentials Plus standards with preparations underway for the next health check. • Incident response is reviewed by the IT management team working with the Resilience team. A new incident communications plan has been developed and staff training is underway. • Ongoing awareness driven by regular campaigns such as Cyber Scotland week and posts to the Intranet. • Security reviews are embedded into the onboarding of new systems and the new Change Control process being developed. 3 39
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No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update 2 Digital Modernisation Deliver the implementation of new digital solutions that will support the wider transformation of the Council, including the more efficient and effective delivery of services, to internal and external service users. This will include the implementation of Oracle Fusion (Finance & Corporate Resources), Liquidlogic (Social Work) and HOME (Housing & Technical Resources). Executive Director of Finance and Corporate Resources • Major system upgrades progressing with Oracle Fusion now fully live. Work continues on LiquidLogic and Home projects. Formal Project Review Boards are in place for all major projects. • Digital Transformation programme being developed with work on governance, skills and opportunities well underway. Project Review Board and separate steering group will be put in place in Q4 24/25. • Work to transform Customer Engagement also underway with detailed action plan in place. 3 Financial Challenges Exceptional increase in costs, reduction in council funding, resulting in difficulties maintaining front line services The Council faces a challenging situation in the medium to long-term because of reduced funding in real terms, rising costs and an increase in demand. The Council has developed a long-term strategy which identifies budget pressures, future risks and uncertainties, and projects budget gaps to 2027/2028. Chief Executive Director of Finance and Corporate Resources Reports on the Council’s financial position and challenges are regularly presented to the Executive Committee. A report titled 2025/2026 to 2027/2028 Revenue Budget Strategy was presented to the Executive Committee in June 2024. That report focussed on the financial outlook for the next 3 years, highlighting a Budget Gap of £77.275 million. The 40
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No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update The Budget Strategy for 2025/2026 will be updated and presented to councillors in 2024. Budget Gap relating to financial year 2025/2026 was £22.355 million. On 13 November 2024 a report on the 2025/2026 Revenue Budget Gap and Savings was presented to the Executive Committee, which noted that the budget gap had been reduced to £16.455 million. The Council’s Budget Working Group has reformed with cross party membership to support preparations for the Council Budget setting in February 2025, and first met in December 2024. The Budget Strategy has been reviewed following receipt of the Local Government Settlement in December 2024 with an update provided to the Budget Working Group on 9 January 2025 and a Special Executive Committee later in the month. This has allowed elected members to consider the Council’s Budget position for the coming year. 41
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No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update 4 Integration Joint Board – Health and Social Care The need for the Council to deliver the objectives set out in the Integrated Joint Board (IJB) Strategic Commissioning Plan 2022to 2025 The current strategic direction set out and approved by the IJB is detailed within the Strategic Commissioning Plan. The council and NHS Board are required to deploy their resources in line with this strategic direction. The IJB issues Directions that set out the key actions to be delivered by the Council. This includes directions in respect of the actions required in order for the IJB to deliver the balanced budget agreed at its meeting in March 2024. The IJB monitors progress in respect of these Directions. Director, Health and Social Care, South Lanarkshire Health, and Social Care Partnership The South Lanarkshire University Health and Social Care Partnership continues to prioritise public protection and other statutory services as outlined within the Sustainability and Value Programme. Adult Support and Protection (ASP) inquiries increased by 12% from 2022/23 to 2023/24, and whilst the number of inquiries in 2024/25 has been relatively stable, with 996 completed in quarter 1 and 989 in quarter 2, they are indicative of a further rise this year. Performance has remained on target in quarter 2, with 88% of inquiries completed within the 5 working day timescale, against a national target of 75%. The Home Assessment Team in East Kilbride and Rutherglen was inspected by the Care Inspectorate in September 2024 and received grades of ‘good – 4 and 5 - very good’. The service was found to have significant strengths in staffing and how they supported positive outcomes for people. 42
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No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update Lanarkshire Carers is the commissioned service supporting carers in South Lanarkshire. During the second quarter, the organisation engaged with and supported 1,271 carers, identified 327 new carers and supported the completion of 371 Adult Carer Support Plans. The Partnership has strengthened engagement with service users and carers through the use of Care Opinion across all services. Recent statistics have shown that, in its early stages, the Partnership has far exceeded the national average with record levels of engagement. In the second quarter of 2024/2025, 182 stories were received from members of the public. 5 Homelessness The Council has seen unprecedented need and demand for statutory homelessness services including the need for temporary accommodation. Presentations levels during 2023/24 are the highest in the Council since records Director of Housing and Technical Resources The operating context in relation to the prevention of homelessness continues to be extremely challenging. The prevailing socio- economic conditions adversely impacted upon the ability to prevent 43
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No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update began, placing significant pressure on the service and the general services fund. A range of mitigations were approved at Housing and Technical Rersources Committee on 7 February 2023 and these are now in place with managing and monitoring actions in place. Temporary accommodation solutions continue to be explored to minimise breaches of the unsuitable accommodation order and costs incurred through the use of B&B. Other implications such as the Prisoner Early Release, increased asylum levels, continued removal of local connection and potentially new duties of ‘Ask & Act’ within the new Housing Bill could have consequences for the service. homelessness during 2024/2025. This trend has been mirrored nationally. The fifth and final Rapid Rehousing Transition Plan annual review reported to Committee incorporated a new Homeless Strategic plan which details the action being progressed to address the extreme pressures. While there are some early signs of stabilisation in relation to key indicators, the demands being placed upon the service remain at levels unprecedented prior to the surge in demand. These actions agreed by Committee will continue to be monitored closely, with progress updates provided to committee on a regular basis. 6 Sustainable Development and Climate Change A new Strategy for 2022 to 2027 was developed and presented to Council in June 2022 for approval together with the Council Plan and Community Plan. An Action Plan was developed for the first year of the Strategy, and this . continues to be implemented and reviewed annually with progress updates being Director of Community and Enterprise Resources • The Council’s Sustainable Development and Climate Change (SDCC) Strategy 2022 to 2027 and its accompanying 5-year action plan was developed in 2022. 44
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No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update reported to the Climate Change and Sustainability Committee on a 6 monthly basis. Following a period of public consultation, the council will introduce its first Local Heat & Energy Efficiency Strategy (LHEES) in June 2024. Subject to the availability of finance and taking account of the need to address inequalities and just transition, the introduction of the LHEES will be a key component of a long-term strategy to reduce of carbon emissions, and reduce fuel poverty by 2045. • An annual Action Plan sitting under the 5 year Plan is produced each year and reported biannually at Climate Change and Sustainability Committee (CCS) • Delivery of the SDCC action plan provides the main focus for SLC’s sustainable development activity and incorporates actions from across all five Resources • The 2024/25 Q2 progress report for the SDCC Strategy will be presented at CCS Committee on 18 December 2024 with the Q4 update scheduled for 4 June 2025 • The Action Plan for 2025/26 is scheduled for approval at CCS Committee on 19 March 2025 • A matching exercise was undertaken in development of the 2025/26 Action Plan against the SDCC Strategy 5-year action plan to ensure continued delivery against the long-term actions and priorities. 45
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No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update • The reporting within annual action plans continues to reflect strong progress against longer term strategic ambitions. 7 Economic Strategy The new draft Economic Strategy 2022 to 2027 has been developed and approved by Council on 15th June 2022 as part of a suite of documents accompanying the draft Council Plan and Community Plan. The vision within the Strategy is “to make South Lanarkshire a flourishing, green, dynamic and equitable place for communities, visitors, businesses and investors”. The Strategy is framed around the 3 themes of sustainable, inclusive, economic development- People, Place and Business. Progress on the delivery of the Action Plan will be measured 6-monthly with the results being reported annually to the relevant committees. The Council will continue to lead on local economic recovery for South Lanarkshire businesses through promotion of local economic support networks and Director of Community and Enterprise Resources At this mid-point of the year officers are gathering and reviewing economic outputs to inform the proposed refresh of the strategy going into next financial year. The work on the masterplans in both East Kilbride and Hamilton is continuing at pace with important key milestones around funding for East Kilbride achieved with Executive Committee approval given for the project outline business case in December 2024 which included the funding package. The sale of sites in both East Kilbride and Hamilton to third parties shows the strength of the masterplans in terms of stimulating market confidence in both towns. The delivery of City Region projects continues in line with programme 46
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No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update contribution to the pan-Lanarkshire Economic Forum. The Council will also take forward its plans for the regeneration of Hamilton and East Kilbride, and the delivery of projects through its participation in the Glasgow City Region Deal. particularly around the school estate, roads improvement projects and the design development of the Larkhall Leisure Centre replacement project. 8 South Lanarkshire Leisure and Culture (SLLC) Work in partnership with SLLC to develop relationship, in particular around commissioning, use of assets and financial sustainability. Director of Community and Enterprise Resources A report was presented to the Performance and Review Scrutiny Forum on 27 August 2024 outlining the approach being taken to ensure a successful and impactful leisure and culture service that meets the aims and objectives of the Council, that is more financially sustainable and that works towards the ambitions of net zero. This included a detailed terms of reference for three key workstreams: • a commissioning plan • a long-term estate strategy • an agreed financial relationship between the Council and SLLC An Elected Members awareness session took place in December 2024 47
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No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update to provide an update on progress against each of these workstreams and detail the next steps towards the vision for a successful partnership. 9 Recruitment and Retention Challenges The labour market has tightened and employees have more mobility through agile working which is not necessarily tied to a geographical location. In addition some older workers have reassessed priorities and taken up an option for partial or full retiral earlier than they would have done previously. As a result there are a number of skills in short supply nationally and this is putting pressure on local government services. Examples of this include HGV drivers, procurement and Social Care. The impact on Senior Manager recruitment and retention is also clear and turnover at this level is closely monitored. South Lanarkshire Council has experienced these issues and is taking the following actions:- • Workforce Plans were refreshed to reflect the changed environment Chief Executive and all Directors The Council’s revised Workforce Strategy sets out the Council’s workforce planning arrangements, including strategies for meeting these challenges. Workforce plans are currently being refreshed and will be presented to committee from March 2025 onwards. These will incorporate the requirement for promoting the Council as an employer of choice, increasing candidate pools and the diversity of our workforce. To address the hard to recruit posts, the council will continue to utilise a “grow your own” approach as well as maximising employability and modern and graduate apprentice programmes. 48
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No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update by 30 June 2022. The updated plans were reported to the relevant Resource Committees in September and October 2022 and are being delivered. • A grow your own approach is being used in key areas (recruited graduates in Procurement) and this will continue • Further increasing social media recruitment and use of job fairs • Employability routes will continue to be defined for skills shortage areas (for example, Social care) • Enhanced employee support arrangements are in place and well developed The recruitment strategy is under revision and will be updated to include current good practice. The Council continues to support employees at all stages of their careers and provide emotional support through the employee assistance programme with a view to retaining employees, as well as mandatory, key skills and management and leadership development programmes. Within Education Resources a lack of capacity within the workforce is recorded within the Education Resources Risk Register 2024/2025 with identified controls and measures. This was approved by Education Resources Committee on 29 October 2024. The Resource has completed the national annual census for employees within education (September 2024), which will inform the planned review and update of the Education Resources Workforce Plan 2022 to 2025. 49
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No. Areas identified in 2023/2024 Actions Lead Officer Q2 Progress Update The resultant action planning will focus on optimising existing practices including targeted recruitment campaigns, effective workload management, supportive environments and partnerships with parents and carers. 50
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 18 February 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: 2025/2026 Internal Audit Plan 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] seek approval of the revised Internal Audit Mandate and Charter seek endorsement of the Audit Strategy seek approval of the proposed Internal Audit Plan for 2025/2026 [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- (1) that the revised Internal Audit Mandate and Charter be approved; (2) that the Audit Strategy be endorsed; and (3) that the proposed Internal Audit Plan for 2025/2026 be approved. 1) [1recs] 3. Background 3.1. Internal Audit within South Lanarkshire Council forms part of the Council’s wider governance framework. Output from the function is the delivery of a planned programme of internal audit assignments. Each assignment is formally reported to the Council’s Risk and Audit Scrutiny Committee and, from 1 April 2025, an ‘assignment conclusion’ (previously an ‘audit opinion’) expressed based on the level of assurance that testing has provided. 3.2. The definition of the various levels of assurance that are expressed within an audit report are included at Appendix 1. These assurances, in turn, inform an overall assessment of the adequacy and effectiveness of the Council’s framework of governance, risk management and control arrangements that is reported annually to the Risk and Audit Scrutiny Committee and captured within the Council’s Governance Statement that forms part of the Annual Accounts. 4. Global Internal Audit Standards – Internal Audit Mandate and Charter 4.1. In previous years, the function has operated within the context of an Internal Audit Charter and a set of internal audit standards known as the Public Sector Internal Audit Standards. From 1 April 2025, these Standards will be replaced by the Global Internal Audit Standards. The new standards were issued by the Internal Audit Standards Board and endorsed by the Institute of Internal Auditors. 4.2. The Standards set out a role for those ‘charged with governance’ within an organisation. Within South Lanarkshire Council, the Risk and Audit Scrutiny Committee is determined to be the Committee ‘charged with governance’ and the Standards, therefore, have a specific relevance to the work of this Committee. 4 51
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4.3. As the applicable Standards for the delivery of the 2025/2026 Internal Audit Plan, alongside the proposed Plan, this report sets out their impact on the planning process as well as a consideration of new, relevant requirements. This includes the process to develop the audit plan and the role of the audit committee in approving this plan along with the remit and context within which the internal audit service will operate. The Standards refers to this as the ‘mandate’ that provides the authority for the delivery of the internal audit service. 4.4 Whilst Internal Audit has always operated under a defined Charter, the Global Internal Audit Standards have required this to be revised and for there to be a focus on the ‘mandate’ that establishes the remit of the function. Specifically, the Mandate sets out the authority under which the function will operate as well as reinforcing the principle of independence (in terms of the function’s organisational position and reporting relationships). The Charter sets out wider responsibilities and expectations regarding management support of the internal audit service and, as those charged with governance, the Global Internal Audit Standards require this Mandate to be ‘granted’ by the Council’s audit committee. 4.5. A copy of the proposed Internal Audit Mandate and Charter is attached at Appendix 2 and, ahead of approving the Internal Audit Mandate and Charter, the Committee is required to satisfy itself that it covers the governance arrangements for Internal Audit, including Internal Audit’s reporting line to the Risk and Audit Scrutiny Committee and administrative reporting arrangements. 4.6. The draft Code of Practice for the Governance of Internal Audit in UK Local Government has been issued in conjunction with the Global Internal Audit Standards to provide some further guidance around implementation of the new standards. This code requires the internal audit function to have access to and support from the audit committee and suggests three ways in which an audit committee, such as the Risk and Audit Scrutiny Committee, can demonstrate support. These are to:- enquire around any restrictions that limit the ability of Internal Audit to carry out its responsibilities effectively consider and approve the audit plan meet with the Chief Internal Auditor periodically 4.7. The planning process for 2025/2026 has paid cognisance to the new Global Internal Audit Standards reflecting the requirements for organisational independence and confirming that the Chief Internal Auditor is suitably qualified and experienced (as defined by the Standards) to effectively lead the function. 4.8. Work to progress compliance with the new Global Internal Audit Standards has continued throughout 2024/2025 and time has been allowed within the 2025/2026 Internal Audit Plan to fully imbed all requirements of the Standards in internal audit function activities. Audit assignments undertaken in 2025/2026 and the Annual Report for this year (and going forward) will also reflect the requirements of the new Standards. 4.9. The Committee is asked to note the requirements of the new Standards as set out in paragraphs 4.2 to 4.8 and to approve the Internal Audit Mandate and Charter as reflecting their expectations of the internal audit service to be delivered within South Lanarkshire Council in 2025/2026. 52
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5. Global Internal Audit Standards – Audit Strategy 5.1. A further element of the overall ‘workplan’ that the Standards reference is the Audit Strategy. The Audit Strategy, that underpins the 2025/2026 Internal Audit Plan, is set out in Appendix 3. Broadly this aims to:- 1. deliver the function’s objectives as set out in the Internal Audit Mandate and Charter 2. provide assurance (as part of a rolling programme of work) in relation to the strategic risks that have been identified by the Council and reflect the organisation’s objectives and priorities 3. deliver a risk-based and balanced plan in compliance with the Global Internal Audit Standards that utilises resources available and prioritises assignments to ensure key areas of work are completed in the year 4. invest time to develop audit practices and skills within the team 5.2. The Strategy reflects the need for effective consultation as part of the planning process and, in 2025/2026, invitations were extended to the Internal Audit Team as well as Members and Resources’ Management Teams. The Strategy also sets out the process for considering returned suggestions and includes the matrix used to independently assess areas for inclusion in the annual plan. 5.3. Whilst reflecting the requirements of the new Standards in principle, time has been allocated within the 2025/2026 Internal Audit Plan to further develop the Strategy to ensure that this is robust and fully supports delivery of Internal Audit’s role. 5.4. The Committee is asked to endorse the Internal Audit Strategy noting plans to develop this further in 2025/2026. 6. Internal Audit Plan 2025/2026 Capacity Planning 6.1. At the outset of the planning process each year, capacity to deliver the Audit Plan needs to be determined. Capacity in 2025/2026 has been adjusted to remove the time required to deliver audit plans for the function’s 4 external clients1 and for estimated planned and unplanned leave during the year. This process determined that 1,208 days are available to deliver the Council’s audit plan in 2025/2026. Planning Themes 6.2. The work of the function contributes towards the priorities and values set out within the Council Plan by committing resources to support corporate activity and delivering a core, rolling programme of work that assesses the extent to which financial, operational and reputational risks are mitigated by a series of effective internal controls. This is presented as a balanced plan that complies with Global Internal Audit Standards in terms of its methodology and approach, maximises the resources and skills available within the Council’s internal audit function and delivers a programme of work that informs the annual report. Key themes of the Plan are set out in the diagram below: 1 South Lanarkshire Leisure and Culture, Lanarkshire Valuation Joint Board, SEEMIS and South Lanarkshire Health and Social Care 53
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Content of the Plan 6.3. In 2025/2026, the audit plan recognises the need to commit time to Fusion, a significant new human resources and financial accounting system that was implemented by South Lanarkshire Council in 2024/2025. This new IT system has brought fundamental changes to the Council’s business processes and a suite of new, embedded system controls. During 2024/2025, the staged system implementation has required continuing input by Internal Audit to the development of processes and solutions as well as the provision of advice and guidance around changes in internal controls related to new automated processes and workflows. 2025/2026 will now see the start of a programme of audit work to test all aspects of the new system that will span multi-years. This plan will be refined as testing is progressed and reviewed on an annual basis as part of the planning process. In the medium term, the Council will also implement new social care and housing solutions and time has again been allocated in 2025/2026 to provide consultancy services, as required, on these core systems. 6.4. These commitments must be balanced with the delivery of routine corporate activities, a programme of audits that reflect South Lanarkshire Council’s top risks and reflect the function’s core objectives as set out in the Internal Audit Mandate and Charter. 6.5. Time has been allocated to continue to develop skill sets within the Council’s own internal audit function to make best use of opportunities around the emerging use of data analytics to interrogate systems and controls. This has been trialled in 2024/2025 and has provided management information that can be filtered through a series of risk indicators highlighting areas where internal controls are not working as intended or, potentially, where fraud is occurring. From an audit perspective, this tool provides assurance across a wider data set and limits testing to targeted areas. 6.6. Reflecting the overall audit strategy, having completed a capacity planning exercise and having conducted a programme of extensive consultation, a draft Audit Plan has been developed and is attached at Appendix 4. 6.7. The Plan sets out the name of the proposed assignment, the lead Resource and a brief outline scope for each proposed assignment. Objectives and scopes will be refined by auditors prior to the commencement of work and once a full risk analysis has been completed and key controls identified. Clients will be involved in this initial risk and control assessment and will be consulted prior to the preparation of the audit remit for each assignment. 54
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6.8. To provide further context for this work, assignments have been linked to the Council Plan’s priorities and, where relevant, the top risks as set out in the Corporate Risk Register2. 6.9. The Committee is asked to approve the draft 2025/2026 Internal Audit Plan attached at Appendix 4. 7. Employee Implications 7.1. 1,368 audit days have been calculated as being available in 2025/2026 (inclusive of days to deliver an internal audit service to external clients). Year on year comparisons of the number of days available are difficult due to in year variations linked to periods of planned leave, secondments and personnel changes. All known factors have been reflected in capacity planning. The underlying assumptions will be reviewed throughout the year and any significant changes to the Plan will be re-presented to Risk and Audit Scrutiny Committee. There are no resourcing constraints that would prevent delivery of the Audit Plan required to be reported under the Global Internal Audit Standards. 8. Financial Implications 8.1. Capacity planning has been based on available budget. This is considered to provide sufficient resources to deliver the Audit Plan. 9. Other Implications 9.1. To mitigate against the risk of non-delivery of the Plan, the progress of every assignment is monitored using the Council’s risk management software, Figtree. 10. Integrated Impact Assessment and Consultation Arrangements 10.1. There is no requirement to conduct an integrated impact assessment on the proposed Audit Plan. 10.2. The Plan includes time to provide data to the Council’s External Auditors to assist with their audit and to respond to queries. A copy of the 2025/2026 Audit Plan will be shared with Audit Scotland to ascertain any areas on which they intend to place reliance. Jackie Taylor Executive Director (Finance and Corporate Resources) 27 January 2025 Link(s) to Council Values/Priorities/Outcomes Accountable, effective, efficient and transparent Previous References 2024/2025 Internal Audit Plan, 26 March 2024 List of Background Papers Global Internal Audit Standards Draft Code of Practice for the Governance of Internal Audit in UK Local Government Internal Audit planning documentation 2 Assignments related to corporate tasks do not have a link to the Council’s top risk register. 55
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Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Yvonne Douglas Internal Audit Manager Ext: 2618 (Tel: 01698 452618) E-mail: yvonne.douglas@southlanarkshire.gov.uk 56
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Definitions of Assurance Appendix 1 •There is a sound system of internal control designed to achieve the Service objectives. Advisory risk assessment may be given. No action required or advisory action recommended by Internal Audit.Substantial •Whilst there is a basically sound system of internal control, there are weaknesses which do not have a risk impact but have been raised to highlight areas of inefficiencies. Advisory or low risk assessment given. Actions recommended by Internal Audit.Reasonable •Weaknesses in the internal controls are such as to put the Service objectives at risk. Medium or high risk assessment given. Limited •Control is generally weak leaving the Service open to significant error or abuse. None 57
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Appendix 2 South Lanarkshire Council Internal Audit Mandate and Charter Purpose Internal Audit is an independent assurance function that seeks to provide the Council’s audit committee and senior management with independent and objective assurance and consultative guidance that meets professional standards. Internal Audit seeks to enhance governance, risk management and control processes within the Council to support achievement of the organisation’s objectives and its ability to serve the public interest. The internal audit function aims to operate in a: • Professional and competent manner in compliance with Global Internal Audit Standards issued by the Internal Audit Standards Board and endorsed by the Institute of Internal Auditors effective from 1 April 2025. • Position of organisational independence with a direct accountability to the Council’s audit committee. • Environment that is free from undue influence and demonstrates a commitment to making objective assessments. Adherence to Global Internal Audit Standards The internal audit function will adhere to the mandatory elements of the Global Internal Audit Standards effective from 1 April 2025. Compliance with the Standards will be a self- assessment exercise using a quality assurance and improvement programme. Output from this programme will be reported by the Chief Internal Auditor on an annual basis to the audit committee and senior management. An external assessment of the internal audit function’s compliance with the Global Internal Audit Standards will be undertaken on a periodic basis and in a manner that is compliant with the requirement of the Standards. The arrangements to appoint an external evaluator will be reported to the audit committee and senior management in advance of engaging and the output from their review will be reported timeously to both. Mandate Authority The audit committee grants the internal audit function the mandate to provide the audit committee and senior management with objective assurance, advice, insight and foresight. The authority of the function is established through its direct reporting relationship to the Council’s audit committee that allows for unrestricted access. The audit committee authorises the internal audit function to: 58
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• To examine all council records, systems, cash, stores and other property, to obtain explanations and to enter Council property or land. Access is unrestricted and shall be granted on demand and not necessarily be subject to prior notice. • Allocate resources, formulate plans and communicate findings that deliver the function’s objectives. • Seek cooperation and assistance to delivery internal audit services within South Lanarkshire Council. Within South Lanarkshire Council, the authority to deliver an internal audit service is also set out within the Council’s Financial Regulations, Standing Orders and Scheme of Delegation. Independence, Organisational Position and Reporting Relationships Internal Audit is located within Finance and Corporate Resources, under the direction of the Proper Officer, the Executive Director Finance and Corporate Resources. In addition, general management duties will be delegated from the Executive Director Finance and Corporate Resources to the Chief Internal Auditor and will cover audit matters as well as general management duties, including representation on the Resources Senior Management Team. The Chief Internal Auditor is positioned at a level in South Lanarkshire Council that enables an internal audit service and responsibilities to be performed without interference from management and establishes the idependence of the internal audit function. The establishment structure of the internal audit function will comprise qualified and technician posts with a mix of professional specialisms. Structural reviews may take place from time to time and regular resource monitoring is reported to the Risk and Audit Scrutiny Committee. The Chief Internal Auditor reports directly to the Risk and Audit Scrutiny Committee. This Committee serves as the audit committee for South Lanarkshire Council and independently provides assurance on the soundness of the Council’s control environment and the adequacy of governnace and risk management frameworks. It also delivers scrutiny and oversees external financial reporting processes. The Committee is made up of ten members of the Council and is chaired by a member of the opposition party. Membership changes with each new Council to ensure political balance. Internal Audit reports plans, an annual conclusion and all signifcant audit findings to the Risk and Audit Scrutiny Committee. For external clients, reports and conclusions are presented to audit committees or to client Boards and senior management teams. The Chief Internal Auditor has direct access, reports administratively to the Executive Director Finance and Corporate Resources, the Proper Officer, as defined in Section 95, Local Government Act 1973, meeting with this officer on a regular one to one basis. This relationship will be the escalation route for issues arising within Internal Audit and for those matters where it is appropriate for the Chair of the Risk and Audit Scrutiny Committee to be briefed. The Chief Internal Auditor also has direct access to the Council’s Monitoring Officer and will use this route to report as appropriate. 59
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The Chief Internal Auditor will confirm to the audit committee on an annual basis that the internal audit function is organisationally independent. Any factors that impact on independence will be disclosed to the audit committee along with any issues encountered relating to a limitation of scope, performance or communication of internal audit findings and conclusions. This disclosure will include an assessment as to the implication of this limitation and the impact on the internal audit function’s ability to fulfil its mandate. Changes to the Mandate and Charter Circumstances may require either or both the internal audit mandate or elements of the internal audit charter to be amended or updated. This could include a significant change in the Global Internal Audit Standards or material changes in organisational structure, operational environment or new laws or regulations that impact on the nature and scope of internal audit services. Where such a revision is required, a revised Internal Audit Mandate and Charter will be presented to the Risk and Audit Scrutiny Committee and senior management for approval. The role of the Audit Committee The Executive Director Finance and Corporate Resources and the Chief Internal Auditor should seek to maintain sound working relationships with appropriate elected members and ensure that good channels of communication are maintained. The audit committee will discuss with the Chief Internal Auditor the function’s mandate in terms of its role, responsibility, scope and services and will review and approve the Internal Audit Mandate and Charter on an annual basis. Members of the the Risk and Audit Scrutiny Committee and the Chief Internal Auditor are able to meet privately. Internal Audit report all findings from concluded assignments via progress reports to the Risk and Audit Scrutiny Committee. Lines of communication between the Chairs of all Committees and the Chief Internal Auditor will be open at all times. All elected members are free to raise concerns directly with the Chief Internal Auditor and input to the Internal Audit Charter and audit plan. Areas suggetsed for inclusion in the audit plan will be assessed in terms of risk prior to any audit work being undertaken. Enquiries from elected members will follow the Council’s protocols and guidance. The Risk and Audit Scrutiny Committee will approve a risk-based internal audit plan on an annual basis having satisfied itself around the adequacy of budgets, qualifications and comptencies of the internal audit function and of the Chief Internal Auditor to deliver the plan. The Committee will also satisfy itself that a quality assurance and improvement programme has been established and review the results of the quality assurance and improvement programme on an annual basis. The Risk and Audit Scrutiny Committee will seek assurances that there has been no limitiation in scope or resources and receive regular updates in relation to performance to 60
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allow this to be assessed relative to the function’s objectives and individual roles and responsibilities. Chief Internal Auditor Role and Responsibilities The Chief Internal Auditor will ensure that internal auditors: • Comply with the Global Internal Audit Standards and the key principles of Ethics and Professionalism set out within the Standards. • Understand and embace the organisation’s legitimate and ethical expectations, recognising conduct that is contrary to those expectations. • Promote an ethics based culture within South Lanarkshire Council. • Report organisational behaviour that does not conform with the organisation’s ethical expectations. Objectivity The Chief Internal Auditor has a responsibility to ensure that the internal audit function operates in an environment where the ability of auditors to carry out their responsibilities in an objective manner across all aspects of the audit engagement is not threatened. Any impairment in such will be disclosed to the approriate parties. Within South Lanarkshire Council, the Employee Code of Conduct provides guidance on the type and nature of interests that should be declared (including paid employment outside the Council and personal interests in contracts). Auditors must declare their interests in accordance with the Code of Conduct and with regard to the audit principle of independence, notifying the Chief Internal Auditor of any conflicts of interest which may arise. This formal declaration is required to be renewed on an annual basis but will be revisited should any conflicts arise. This disclosure extends to any impairments of independence either actual or perceived with an expectation that internal auditors will act with profesional objectivity in all aspects of the audit engagement, that this results in balanced assessments that considers all facts and circumstances and avoids bias and undue influence. Auditors will not be assigned to review or be involved in any activity where they have previously had operational or other involvement, usually within a period of one year. This includes instances where Internal Audit employees have been consulted during system, policy or procedural developments. Internal auditors will maintain an objective approach in the delivery of audit assignments, avoid compromising quality and retain overall authority over the presentation of audit findings. They will also ensure that they display professional objectivity in all aspects of their role, making informed and balanced assessments and avoiding conflicts of interest, bias and undue influence. Managing the Internal Audit function The Chief Internal Auditor has a responsibility to: • Prepare an annual plan for formal review and agreement by the audit committee and senior management. 61
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• Review the plan, amending to reflect significant changes in the organisation’s risks, operations or objectives and communicating these amendments to the audit committee and senior management. • Communicate the impact of any resource implications. • Ensure that all audit engagements are conducted in accordance with the Global Internal Audit Standards. • Deliver a range of audit assignments, as set out in the approved annual Audit Plan, and communicate assignment findings and conclusions to management. • Make recommendations for improvements and follow up on the delivery of these actions. • Communicate the results of each audit assignment to the audit committee and senior management (annually). • Ensure a system of close supervision of audit work, and maintain a review of audit files through the supervisory structure ensuring that the function possesses the knowledge, skills and competencies to meet the requirements of the Global Internal Audit Standards and fulfil the internal audit mandate. • Monitor trends, patterns and emerging issues, reporting to the audit committee and senior management as appropriate. • Consider and promote new approaches to internal audit service delivery. • Ensure adherence to South Lanarkshire Council’s wider policies and procedures. Any conflict with such and either the Internal Audit Mandate and Charter or the Global Internal Audit Standards will require to be resolved and reported to the audit committee and senior management. • Consider extent to which reliance can be placed on the work of external auditors, inspectors and regulators. Communicating with the Audit Committee and Senior Management The Chief Internal Auditor will report to the audit committee and senior management, the internal audit function’s mandate; the Audit Plan and delivery of this Plan; significant revisions to the Plan; any potential impairments to independence; results of the quality assurance and improvement programme (including conformance with the Global Internal Audit Standards) and an action plan to address any gaps in compliance, if required. The Chief Internal Auditor will also convey any significant risk exposures and any mangement responses which are deemed to represent a level of risk contrary to South Lanarkshire Council’s risk management approach. All planned audit assignments will formally be reported and every assignment will be closed after review by audit management. All Internal Audit reports will be submitted to the Executive Director Finance and Corporate Resources, and to recipients within the Resource being audited, incluing the Executive Director, Head of Service and the auditee. Copies of reports relating to routine planned assignments will also be forwarded to external auditors. The Audit Manager will plan for regular formal consultations with Heads of Service and Executive Directors, especially when preparing the formal audit plan. Feedback on performance and value of work undertaken will be sought. Heads of Service will be copied on every report affecting their area of responsibility. Effective relationships will be maintained by both parties and confidentiality of information will be protected, unless this would prevent the delivery of audit assurance. 62
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Quality Assurance and Improvement Programme The Chief Internal Auditor will develop, deliver and maintain a quality assurance and improvement programme that will assess all aspects of the internal audit function. This includes compliance with professional standards and applicable and relevant laws and regulations. In addition, a suite of performance measures will be reported at each meeting of the audit committee and to senior management as part of the annual reporting process. All elements will be considered to assess the internal audit function’s progress with the delivery of its objectives. Where required, an improvement plan will be developed to promote an ethos of continuous improvement. The quality and assurance programme will be internally assessed with an external inspection being completed once in each five-year period. The quality and assurance programme will be reported on an annual basis to the audit committee and to senior management. Scope and Types on Internal Audit Service Internal Audit covers the breadth of South Lanarkshire Council activities and operations to provide independent assurance and advisory services in relation to: • governance, risk management and control arrangements Where required, this will lead to recommended improvements in control, performance and productivity to support the achievement of corporate objectives. This may include an assessment of: • Risks that compromise achievement of organisational strategic objectives. • The extent of compliance with financial and operational procedures, policies, regulations and legislation and their impact on operation. • Contribution and the identification of opportunities. • Financial and operational controls in terms of their adequacy and application. • Compliance with all corporate standards and frameworks, ensuring that management information is produced accurately. The existence of Internal Audit does not diminish the responsibility of management to exercise sound systems of internal control. It is clearly and solely a management responsibility to ensure that activities are conducted in a secure, efficient and well-ordered manner and that finances are safeguarded and used to maximum effect. This includes identifying and managing risks including fraud. Managers are expected to provide requested information within reasonable timescales. 63
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Audit Strategy Appendix 3 Background The internal audit function within South Lanarkshire Council delivers a service in compliance with Global Internal Audit Standards. The Purpose of the Internal Audit Strategy The purpose of the audit strategy is to direct the content of the annual audit plan providing assurance that a coherent and effective plan is delivered. The strategy directs a programme of work that covers significant risks that, in turn, informs an independent and objective assessment of the organisation’s governance, risk management and control frameworks. The strategy aims to align audit work with the Council’s risks, strategic goals and objectives in line with recognised standards, guidance and other best practice. Strategic Objectives of Internal Audit The over-arching aims of the strategy is to ensure that the annual audit plan recognises and reflects: • The function’s objectives as set out in the Internal Audit Mandate and Charter. • The key objective of the function to provide assurance (as part of a rolling programme of work) in relation to the strategic risks that would prevent the organisation meeting its objectives and priorities. • Delivery of a risk-based and balanced plan that complies with the Global Internal Audit Standards utilising resources available and prioritising assignments to ensure key areas of work are completed in the year. • An investment in time to develop audit practices and skills within the team. Audit Planning Process The annual audit plan is developed through: • A review of Council-wide risk registers to ascertain key risks. • An analysis of and output from audit work over a rolling five-year period. • Consideration of proposals from Members, senior management and the internal audit function. • An identification of residual gaps from previous audit planning reviews. In determining items for inclusion in a draft Plan, all proposed assignments generated from research and consultation are risk assessed to determine suitability. The risk assessment utilises a series of criteria set out in the attached appendix. The risk of significant subsequent changes to the Plan, arising from a change in the Council’s priorities or risks, are managed through a level of contingency time that provides a level of flexibility throughout the year. Significant amendments to the Plan will be presented to the Council’s audit committee for approval. Quality Control and Assurance The Audit Plan will be delivered in compliance with Global Internal Audit Standards. 64
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Progress against the audit strategy is reported to the Committee as part of regular monitoring reports that are presented at each meeting. Delivery of the strategy will be evidenced by the completion of the Internal Audit Plan in-year and will be monitored through the performance indicators regularly reported to the Council’s audit committee. Revision The Internal Audit Strategy will be subject to an annual review and presented in with the annual audit plan to the Council’s audit committee. 65
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Assessment Criteria (Appendix to Audit Strategy) • Systems that process significant income or expenditure. Materiality -value • An estimate of the number of transactions processed by the systems / activities per annum. Materiality -volume • The significance of the system / process to the activities of the Council. Significance / profile • Consideration of the Council's top risks and the controls that mitigate these risks (has IA reviewed the effectiveness of the controls recently / can IA add any value via review). Council's top risks • Recent changes to the system / process or the likelihood of change to the systems / process in the audit period planned. Change • Extent to which the system / activity is subject to regulation or contractual obligation. Regulatory / contractual • The extent to which a service / activity is monitored or audited by an external body (may mean less priority for IA work unless external reviews are highlighting risks that would benefit from IA review). Other areas of assurance (assurance mappintg) • Highlighting areas of risk based on IA team knowledge (via output from previous audits, team knowledge/awareness). Prior audits / audit knowledge Areas where there is "opportunity" inherent within a system / activity for fraud and corruption to occur. • The turnover of staff, especially with key skills (new teams / areas with significant vacancies may bring risks via "opportunity for process not to be followed, controls to be overriden, such as appropriate authorisation or SOD). Staff tunover • Consideration of the processes and systems that facilitate acheivement of the council's priorities. Council priorities 66
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Proposed 2025/2026 Internal Audit Plan Appendix 4 Lead Resource Audit assignment Outline Scope Days Council Priority Top Risk ranking Priority Governance and Corporate Tasks FCR Governance Statement Undertake review of evidence that supports SLC’s Annual Governance Statement and provide 2024/2025 annual assurance statement for Glasgow City Region – City Deal. 5 Work to recover, progress and improve. High All Informal Follow Up Prompt Resources on a quarterly and monthly basis of actions due within that period. Collate responses for reporting. 6 Work to recover, progress and improve. High FCR 2024/2025 Annual Report Finalise 2024/2025 audit reports. Prepare annual statement of assurance for 2024/2025. Present to CMT and RASC. 90 Work to recover, progress and improve. High All Committee reporting Prepare reports to present to CMT and RASC. 10 Work to recover, progress and improve. High All 2026/2027 Audit Plan Develop draft plan in compliance with the Global Internal Audit Standards. 10 Work to recover, progress and improve. High All National Fraud Initiative Coordinate investigation of matches from 2024 National Fraud Initiative Exercise (including time to investigate some categories of matches). Report outcomes to CMT and RASC. 45 Work to recover, progress and improve. Very High High All Advice and guidance Provision of advice and guidance. 60 Work to recover, progress and improve. High 67
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Lead Resource Audit assignment Outline Scope Days Council Priority Top Risk ranking Priority All Data Analytics Develop strategy, train team and identify areas of application. 20 Work to recover, progress and improve. High FCR Global Internal Audit Standards Fully implement new Global Internal Audit Standards across all aspects of the internal audit service. Fully develop an audit strategy and an assurance mapping framework (including tracking of output from external inspectors and delivery of improvement actions). 45 Work to recover, progress and improve. Very High High All Impact Assessment Provide assurance that South Lanarkshire Council is meeting its statutory duties by conducting sufficiently robust impact assessments. 30 Work to recover, progress and improve. Very High High All Financial Sustainability Assess robustness of controls in place that manage South Lanarkshire Council’s top risk. 15 Work to recover, progress and improve. Very High High FCR Procurement Provide assurance around best practice procurement practices including compliance with the UK Procurement Act 2023. 20 Work to recover, progress and improve. High High FCR External Audit Provide 2024/2025 general ledger data to External Audit for the audit of the financial accounts for the year ended 31 March 2025. 25 Work to recover, progress and improve. Medium All Attend internal and external working groups Attend, respond to requests, participate in consultations and provide updates. 15 Work to recover, progress and improve. Medium 68
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Lead Resource Audit assignment Outline Scope Days Council Priority Top Risk ranking Priority Internal Controls All General Follow Up For all Council Resources, identify audit recommendations due in the period April 2024 to March 2025. Risk assess and follow-up to ensure implementation of all high risk actions. 10 Work to recover, progress and improve. High All Follow Up Detailed follow up in areas where audit actions were more significant to provide assurance that recommendations have been implemented and internal controls improved. 90 Work to recover, progress and improve. High All General contingency Respond to requests for unplanned work. 62 Work to recover, progress and improve. High FCR Fusion Testing of system post implementation. 146 Work to recover, progress and improve. High High All Fraud React to fraud alerts through internal and external sources and disseminate information as appropriate. Undertake investigations as required. Deliver anti-fraud plan and review processes to ensure compliant with the Criminal Finances Act. 120 Work to recover, progress and improve. Very High High HTR New Housing System Work relating to the controls in the new housing system (key control areas such as systems access controls, systems permissions/rules and implications for segregation of duties and authorisation, audit trail and security of data). 20 Work to recover, progress and improve. High High 69
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Lead Resource Audit assignment Outline Scope Days Council Priority Top Risk ranking Priority SWR New Social Work system Work relating to the controls in the system (key control areas such as systems access controls, systems permissions/rules and implications for segregation of duties and authorisation, audit trail and security of data). 20 Work to recover, progress and improve. High High SWR Self-Directed Support Assessment of how new system is addressing (system) actions from original audit. 20 Put people first and reduce inequality. High High FCR Licensing Provide assurance that robust licensing processes are in place and that South Lanarkshire Council is meeting its statutory duties. 30 Work to recover, progress and improve. High All UK Corporate Governance Use of the updated Corporate Governance Code to review control and risk management arrangements (including the prevention and detection of material fraud). 22 Work to recover, progress and improve. High CER City Deal Assess effectiveness of the process in place to track delivery of over-arching renewal and recovery goals in projects that have been delivered to date. 35 Work to recover, progress and improve. High High All External Reports Review recommendations made by external inspectors and regulators in wider, national reports to ensure there has been an appropriate response by South Lanarkshire Council with action taken where required. This will include the recent report by the Accounts Commission on the fraud at Aberdeen City Council. 35 Work to recover, progress and improve. High 70
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Lead Resource Audit assignment Outline Scope Days Council Priority Top Risk ranking Priority All Digital Transformation Assess progress with the implementation of new digital solutions that will support the wider transformation of the Council, including the more efficient and effective delivery of services. Specific focus on follow- up of cyber resilience audit and preparation for PSTN switch off. 10 Work to recover, progress and improve. High High CER Waste Services Review progress with implementing identified actions from the Waste Services Review. 30 Work to recover, progress and improve. Medium All Tracking Systems Review of tracking systems in use across South Lanarkshire Council to establish cost, use and future development. 26 Work to recover, progress and improve. Medium HTR Stores Attend year end stock check. Undertake a sample check of stock quantities. Assess stock controls to provide assurance that these are effective. 16 Work to recover, progress and improve. Medium All Overtime Review of overtime processes to ensure business need confirmed and authorised in advance of working. Test check key controls in the claim process to provide assurance that these are effective and working as intended. 30 Work to recover, progress and improve. Medium EDR Early Years Review of process to gather Early Year fees to ensure that this is effective and efficient. 35 Put people first and reduce inequality. Medium 71
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Lead Resource Audit assignment Outline Scope Days Council Priority Top Risk ranking Priority Risk Management All Sustainability Provide ongoing assurance that plans are practically deliverable in the short, medium and long term and that in-year progress against targets is monitored and reported. 40 Work towards a sustainable future in sustainable places. Very High High All Risk Register Annual review of fraud risk registers. 5 Work to recover, progress and improve. High EDR Pupil Equity Fund Risk Indicators Provide Education with data / risk indicators to facilitate analysis in line with areas falling within the risk indicator categories. 10 Put people first and reduce inequality. Medium TOTAL DAYS 1,208 Delivery of an internal audit service to external clients N/A Audit Plan Deliver internal audit service to External Clients. 160 N/A N/A N/A TOTAL DAYS 1,368 72
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South Lanarkshire Council Annual Audit Plan 2024/25 Prepared for South Lanarkshire Council February 2025 5a 73
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South Lanarkshire Council Annual Audit Plan | 2 Contents Introduction 3 Audit scope and responsibilities 4 Audit of the annual accounts 6 Wider scope and Best Value 13 Reporting arrangements, timetable and audit fee 16 Other matters 19 Accessibility You can find out more and read this report using assistive technology on our website www.audit.scot/accessibility. 74
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Introduction | 3 Introduction Purpose of the Annual Audit Plan 1. The purpose of this Annual Audit Plan is to provide an overview of the planned scope and timing of the 2024/25 audit of South Lanarkshire Council’s annual accounts. It outlines the audit work planned to meet the audit requirements set out in auditing standards and the Code of Audit Practice, including supplementary guidance. Appointed auditor and independence 2. John Boyd, of Audit Scotland, has been appointed by the Accounts Commission as external auditor of South Lanarkshire Council for the period from 2022/23 until 2026/27. The 2024/25 financial year is therefore the third of the five-year audit appointment. 3. John Boyd and the audit team are independent of South Lanarkshire Council in accordance with relevant ethical requirements, including the Financial Reporting Council’s Ethical Standard. This standard imposes stringent rules to ensure the independence and objectivity of auditors. Audit Scotland has robust arrangements in place to ensure compliance with ethical standards. The arrangements are overseen by the Executive Director of Innovation and Quality, who serves as Audit Scotland’s Ethics Partner. 4. The Ethical Standard requires auditors to communicate any relationships that may affect the independence and objectivity of the audit team. There are no such relationships pertaining to the audit of South Lanarkshire Council to communicate. 75
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Audit scope and responsibilities | 4 Audit scope and responsibilities Scope of the audit 5. The audit is performed in accordance with the Code of Audit Practice, including supplementary guidance, International Standards on Auditing (UK), and relevant legislation. These set out the requirements for the scope of the audit which includes: • An audit of the financial statements and an opinion on whether they give a true and fair view and are free from material misstatement. • An opinion on statutory other information published with the financial statements in the annual accounts, the Management Commentary, and the Annual Governance Statement, and an opinion on the audited part of the Remuneration Report. • Conclusions on South Lanarkshire Council’s arrangements in relation to the wider scope areas: Financial Management, Financial Sustainability, Vision, Leadership, and Governance, and Use of Resources to Improve Outcomes. • Reporting on the South Lanarkshire Council’s arrangements for securing Best Value. • Providing assurance on the Housing Benefit Subsidy Claim, Non--Domestic Rates Return, the Whole of Government Accounts return, and summary financial statements. • A review of South Lanarkshire Council’s arrangements for preparing and publishing statutory performance information. • Provision of an Annual Audit Report setting out significant matters identified from the audit of the annual accounts and the wider scope areas specified in the Code of Audit Practice. Responsibilities 6. The Code of Audit Practice sets out the respective responsibilities of South Lanarkshire Council’s and the auditor. A summary of the key responsibilities is outlined below. Auditor’s responsibilities 7. The responsibilities of auditors in the public sector are established in the Local Government (Scotland) Act 1973. These include providing an independent opinion on the financial statements and other information 76
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Audit scope and responsibilities | 5 reported within the annual accounts, and concluding on South Lanarkshire Council’s arrangements in place for the wider scope areas. South Lanarkshire Council’s responsibilities 8. South Lanarkshire Council has primary responsibility for ensuring proper financial stewardship of public funds, compliance with relevant legislation and establishing effective arrangements for governance, propriety and regularity that enables it to successfully deliver its objectives. The features of proper financial stewardship include: • Establishing arrangements to ensure the proper conduct of its affairs. • Preparation of annual accounts, comprising financial statements and other information that gives a true and fair view. • Establishing arrangements for the prevention and detection of fraud, error and irregularities, and bribery and corruption. • Implementing arrangements to ensure its financial position is soundly based. • Making arrangements to secure Best Value. • Establishing an internal audit function. 77
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Audit of the annual accounts | 6 Audit of the annual accounts Introduction 9. The audit of the annual accounts is driven by materiality and the risks of material misstatement in the financial statements, with greater attention being given to the significant risks of material misstatement. This chapter outlines materiality, the significant risks of material misstatement that have been identified, and the impact these have on the planned audit procedures. Materiality 10. The concept of materiality is applied by auditors in planning and performing an audit, and in evaluating the effect of any uncorrected misstatements on the financial statements or other information reported in the annual accounts. 11. Broadly, the concept of materiality is to determine whether matters identified during the audit could reasonably be expected to influence the decisions of users of the financial statements. Auditors set a monetary threshold when determining materiality, although some issues may be considered material by their nature. Therefore, materiality is ultimately a matter of the auditor’s professional judgement. 12. The materiality levels determined for the audit of South Lanarkshire Council and its group are outlined in Exhibit 1. Exhibit 1 2024/25 Materiality levels for South Lanarkshire Council and its group Materiality Audited body Group Materiality – based on an assessment of the needs of users of the financial statements and the nature of South Lanarkshire Council’s operations, the benchmark used to determine materiality is gross expenditure (less Integration Joint Board contributions) based on the audited 2023/24 financial statements. Materiality has been set at 2 per cent of the benchmark. £26.4 million £26.6 million 78
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Audit of the annual accounts | 7 Materiality Audited body Group Performance materiality – this acts as a trigger point. If the aggregate of misstatements identified during the audit exceeds performance materiality, this could indicate that further audit procedures are required. Using professional judgement, performance materiality has been set at 75 per cent of planning materiality. £19.8 million £19.9 million Reporting threshold – all misstatements greater than the reporting threshold will be reported. £1.32 million £1.33 million Source: Audit Scotland Significant risks of material misstatement to the financial statements 13. The risk assessment process draws on the audit team’s cumulative knowledge of South Lanarkshire Council, including the nature of its operations and its significant transaction streams, the system of internal control, governance arrangements and processes, and developments that could impact on its financial reporting. 14. Based on the risk assessment process, significant risks of material misstatement to the financial statements have been identified and these are summarised in Exhibit 2, page 8. These are the risks which have the greatest impact on the planned audit approach, and the planned audit procedures in response to the risks are outlined in Exhibit 2. 15. Over the course of the year, South Lanarkshire Council implemented a new IT system. At this stage in the audit, no significant risks have been identified in relation to this. South Lanarkshire Council have not highlighted any significant issues in the implementation or operation of the new system. 16. The risk assessment process is an iterative and dynamic process. The assessment of risks set out in this Annual Audit Plan and Exhibit 2 may change as more information and evidence is obtained over the course of the audit. Where such changes occur, these will be reported to South Lanarkshire Council and those charged with governance, where relevant. 79
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Audit of the annual accounts | 8 Exhibit 2 Significant risks of material misstatement to the financial statements Risk of material misstatement Planned audit response Fraud caused by management override of controls Management is in a unique position to perpetrate fraud because of management’s ability to override controls that otherwise appear to be operating effectively. The audit team will: • Evaluate the design and implementation of controls over journal entry processing. • Make inquiries of individuals involved in the financial reporting process about inappropriate or unusual activity relating to the processing of journal entries and other adjustments. • Test journals entries, focusing on those that are assessed as higher risk. • Evaluate significant transactions outside the normal course of business. • Assess the adequacy of controls in place for identifying and disclosing related party relationships and transactions in the financial statements. • Assess changes to the methods and underlying assumptions used to prepare accounting estimates and assess these for evidence of management bias. 80
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Audit of the annual accounts | 9 Risk of material misstatement Planned audit response Valuation of property, plant and equipment South Lanarkshire Council held £3,735 million of property, plant, and equipment (PPE) at 31 March 2024, of which £3,324 million was land and building assets. South Lanarkshire Council is required to value land and building assets at existing use value where an active market exists for these assets. Where there is no active market, these assets are valued on a depreciated cost replacement (DRC) basis. As a result, there is a significant degree of subjectivity in these valuations which are based on specialist assumptions, and changes in the assumptions can result in material changes to valuations. The audit team will: • Evaluate the design and implementation of controls over the valuation process. • Review the information provided to the valuer and assess this for completeness and accuracy. • Evaluate the competence, capabilities, and objectivity of the valuer. • Obtain an understanding of management’s involvement in the valuation process to assess if appropriate oversight has occurred. • Review the appropriateness of the key data and assumptions used in the 2024/25 valuation process, and challenge these where required. • Review management’s assessment that the value in the balance sheet of assets not subject to a valuation process in 2024/25 is not materially different to current value at the year-end, and challenge this where required. • Review LASAAC guidance, which specified Scottish authorities should use the beacon approach methodology to value council dwellings, to ensure the council’s valuation process complies with applicable guidance. 81
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Audit of the annual accounts | 10 Risk of material misstatement Planned audit response Estimation of the pension liability South Lanarkshire Council had a pension liability of £113.666 million at 31 March 2024. South Lanarkshire Council is a member of Strathclyde LGPS, which is a defined benefit pension scheme. Strathclyde LGPS is subject to formal valuation every three years, and this sets out each member’s share of the scheme’s overall pension liability and contributions for the next three years. The last formal valuation was carried out at 31 March 2023. An estimation of South Lanarkshire Council’s share of the overall pension liability is required in each intervening year between formal valuations, and these are carried out by Hymans Robertson. There is a significant degree of subjectivity in the estimation of the pension liability as the estimation is based on specialist assumptions, and changes in the assumptions can result in material changes to the estimation. The audit team will: • Evaluate the design and implementation of controls over the pension liability estimation process. • Review the information provided to the actuary and assess this for completeness and accuracy. • Evaluate the competence, capabilities, and objectivity of the actuary. • Obtain an understanding of the management’s involvement in the estimation process to assess if appropriate oversight has occurred. • Review the appropriateness of the key data and assumptions used by management for the estimation of the pension liability, and challenge these where required. • Audit Scotland uses PwC as an auditor’s expert to inform the planned audit procedures outlined above. Therefore, the audit team will also review the information provided by PwC and reflect this in the planned audit procedures where required. Source: Audit Scotland Key audit matters 17. The Code of Audit Practice requires public sector auditors to communicate key audit matters. Key audit matters are those matters, that in the auditor’s professional judgement, are of most significance to the audit of the financial statements and require most attention when performing the audit. 18. In determining key audit matters, auditors consider: • Areas of higher or significant risk of material misstatement. • Areas where significant judgement is required, including accounting estimates that are subject to a high degree of estimation uncertainty. • Significant events or transactions that occurred during the year. 82
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Audit of the annual accounts | 11 19. The matters determined to be key audit matters will be communicated in the Annual Audit Report. Exhibit 2 outlines the significant risks of material misstatement to the financial statements that have been identified, including those that have greatest impact on the planned audit procedures and require most attention when performing the audit. Group audit 20. South Lanarkshire Council is part of a group and prepares group financial statements. The group is made up of nine components, including South Lanarkshire Council which is the parent of the group. Risk assessment procedures have been performed on the group audit to identify if there are any risks of material misstatement to the group financial statements, or any components where audit procedures are required for the purposes of the group audit. The outcome of the risk assessment procedures on the group audit are outlined in Exhibit 3. 21. The risk of material misstatement to the group financial statements will continue to be assessed throughout the audit. Exhibit 3 Outcome of risk assessment procedures on the group audit Group component Accounting treatment Risk of material misstatement Audit procedures required Auditor South Lanarkshire Council Consolidated on a line-by-line basis Yes – Exhibit 2 Yes – full scope audit Audit Scotland South Lanarkshire Leisure and Culture Limited Consolidated on a line-by-line basis No No Azets Routes to Work South Consolidated on a line-by-line basis No No McDaid & Partners South Lanarkshire Integration Joint Board Accounted for on equity basis No No Audit Scotland Lanarkshire Valuation Joint Board Accounted for on equity basis No No Audit Scotland 83
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Audit of the annual accounts | 12 Group component Accounting treatment Risk of material misstatement Audit procedures required Auditor Clyde Valley Learning and Development Joint Committee Accounted for on equity basis No No Audit Scotland Strathclyde Concessionary Travel Scheme Joint Committee Accounted for on equity basis No No Audit Scotland Strathclyde Partnership for Transport Accounted for on equity basis No, but is material to group financial statements Yes – risk assessment questionnaire and analytical procedures Audit Scotland Common Good Fund Consolidated on a line-by-line basis No No Audit Scotland Source: Audit Scotland 22. Where audit procedures are required on a component’s financial statements, and the component auditor is different to South Lanarkshire Council’s appointed auditor, group audit instructions will be issued to the component auditor outlining expectations and requirements in performing these audit procedures. 84
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Wider scope and Best Value | 13 Wider scope and Best Value Introduction 23. Reflecting the fact that public money is involved, the Code of Audit Practice requires that public audit is planned and undertaken from a wider perspective than in the private sector. The wider scope audit set out by the Code of Audit Practice broadens the audit of the annual accounts to include consideration of additional aspects or risks in four wider scope areas, which are summarised below: • Financial Management – this means having sound budgetary processes. Factors that can impact on South Lanarkshire Council being able to secure sound financial management include the strength of the financial management culture, accountability, and arrangements to prevent and detect fraud, error and other irregularities, bribery and corruption. • Financial Sustainability – this means looking forward over the medium and longer term in planning the services to be delivered and how they will be delivered effectively. This is assessed by considering South Lanarkshire Council’s medium- to longer-term planning for service delivery. • Vision, Leadership and Governance – this means having a clear vision and strategy, with set priorities within the vision and strategy. This is assessed by considering the clarity of plans in place to deliver the vision and strategy and the effectiveness of the governance arrangements to support delivery. • Use of Resources to Improve Outcomes – this means using resources to meet stated outcomes and improvement objectives through effective planning and working with partners and communities. This is assessed by considering South Lanarkshire Council’s arrangements for ensuing resources are deployed to improve strategic outcomes, meet the needs of service users, and deliver continuous improvement. 24. A conclusion on the effectiveness and appropriateness of arrangements South Lanarkshire Council has in place for each of the wider scope areas will be reported in the Annual Audit Report. Best Value 25. Under the Code of Audit Practice, the audit of Best Value in councils is fully integrated within the annual audit. As part of the annual audit, auditors 85
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Wider scope and Best Value | 14 are required to take a risk-based approach to assessing and reporting on whether South Lanarkshire Council has made proper arrangements for securing Best Value, including follow up of findings previously reported in relation to Best Value. 26. The Accounts Commission also reports nationally on thematic aspects of councils’ approaches to, and performance in, meeting their Best Value duties. As part of the annual audit, thematic reviews, as directed by the Accounts Commission, are conducted on South Lanarkshire Council. The thematic review for 2024/25 is on the subject of service transformation and involves considering how South Lanarkshire Council is redesigning services to maintain outcomes and deliver services more efficiently. Conclusions and judgements on the thematic review will be reported in a separate Management Report and summarised in the Annual Audit Report, where required. 27. At least once over the five-year appointment, the Controller of Audit will report to the Accounts Commission on South Lanarkshire Council’s performance in meeting its Best Value duties. The second year of this programme runs from October 2024 to August 2025. South Lanarkshire Council is not included in the second year of the programme. Significant wider scope and Best Value risks 28. The risk assessment process has identified risks in the wider scope areas and Best Value as outlined in Exhibit 4, and this includes the planned audit procedures in response to the risks. 86
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Wider scope and Best Value | 15 Exhibit 4 Wider scope and Best Value risks Description of risk Planned audit response Financial sustainability South Lanarkshire Council continues to operate in an increasingly complex and challenging environment, aiming to provide the best possible service within the resources available. Although a surplus position of £13.727 million is projected for 2024/25, the council has identified a savings requirement of £77.275 million for the next three years to 2027/28. Management have implemented a programme of reviews to contribute towards addressing the financial pressures. However, there is a risk that the council plans do not deliver the required savings to address the projected shortfall. The audit team will: • Review of the council’s annual budget setting arrangements. • Review and assessment of budget monitoring arrangements. • Review of the council’s medium to longer term financial planning including how the council aligns savings plans and transformation activity with strategic priorities. • On-going review of the council’s financial position and delivery of planned savings. Source: Audit Scotland 87
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Reporting arrangements, timetable and audit fee | 16 Reporting arrangements, timetable and audit fee Audit outputs 29. The outputs from the 2024/25 audit include: • This Annual Audit Plan. • An Independent Auditor’s Report to South Lanarkshire Council and the Accounts Commission setting out opinions on the annual accounts. • An Annual Audit Report to South Lanarkshire Council and the Accounts Commission setting out significant matters identified from the audit of the annual accounts, conclusions from the wider scope and Best Value audit, and recommendations, where required. 30. The matters to be reported in the outputs will be discussed with South Lanarkshire Council for factual accuracy before they are issued. All outputs from the audit will be published on Audit Scotland’s website, apart from the Independent Auditor’s Report, which is included in the audited annual accounts. 31. Target dates for the audit outputs are set by the Accounts Commission. In setting the target dates for the audit outputs, consideration is given to the statutory date for approving the annual accounts, which is 30 September 2025 for local government bodies. 32. The Independent Auditor’s Report and Annual Audit Report are planned to be issued by the target date of 30 September 2025. Audit timetable 33. Achieving the timetable for production of the annual accounts, supported by complete and accurate working papers, is critical to delivery of the audit to agreed target dates. Exhibit 5 includes a timetable for the audit, which has been agreed with management. Agreed target dates will be kept under review as the audit progresses, and any changes required, and their potential impact, will be discussed with South Lanarkshire Council and reported to those charged with governance, where required. 88
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Reporting arrangements, timetable and audit fee | 17 Exhibit 5 2024/25 audit timetable Audit activity South Lanarkshire Council target date Audit team target date Relevant committee date Issue of Annual Audit Plan 10 February 2025 18 February 2025 Annual accounts: • Consideration of unaudited annual accounts by those charged with governance 25 June 2025 25 June 2025 • Submission of unaudited annual accounts and all working papers to audit team 25 June 2025 30 June 2025 • Latest date for audit clearance meeting 5 September 2025 5 September 2025 • Issue of draft Letter of Representation, proposed Independent Auditor’s Report, and proposed Annual Audit Report 12 September 2025 30 September 2025 • Agreement of audited and unsigned annual accounts 12 September 2025 12 September 2025 • Approval by those charged with governance and signing of audited annual accounts 30 September 2025 30 September 2025 • Signing of Independent Auditor’s Report and issue of Annual Audit Report 30 September 2025 Issue of Best Value Management Report 25 April 2025 6 May 2025 Certification of Non-Domestic Rates Return 19 December 2025 Certification of Housing Benefit Subsidy Claim 19 December 2025 Certification of Whole of Government Accounts 19 December 2025 89
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Reporting arrangements, timetable and audit fee | 18 Source: Audit Scotland Audit fee 34. South Lanarkshire Council’s audit fee is determined in line with Audit Scotland’s fee setting arrangements. The proposed audit fee for the 2024/25 audit is set out in Exhibit 6. 35. In setting the audit fee, it is assumed that South Lanarkshire Council has effective governance arrangements in place and the complete annual accounts will be provided for audit in line with the agreed timetable. The audit fee assumes there will be no significant changes to the planned scope of the audit, including no significant additional work in relation to South Lanarkshire Council’s new IT system. Where the audit cannot proceed as planned, for example, due to incomplete or inadequate working papers, the audit fee may need to be increased. Exhibit 6 Audit fee (including VAT) Fee component1 Fee (£) External auditor remuneration 387,680 Pooled costs, such as travel and subsistence costs 9,740 Contribution to audit support costs, including technical guidance and support to auditors - Contribution to the performance audit programme 114,210 Adjustment for average audit price increase 121,820 Total 2024/25 fee 633,450 Source: Audit Scotland 1 Information on the components that make up the total fee can be found in Audit Scotland’s Audit management and quality guidance. 90
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Other matters | 19 Other matters Internal audit 36. South Lanarkshire Council’s is responsible for establishing an internal audit function as part of an effective system of internal control. As part of the audit, the audit team will obtain an understanding of internal audit, including its nature, responsibilities, and activities. 37. While internal audit and external audit have differing roles and responsibilities, external auditors may seek to rely on the work of internal audit where it is considered appropriate. A review of internal audit’s 2024/25 audit plan was carried out to identify if there were any areas where the audit team could rely on its work. The audit team concluded it will not rely on internal audit’s work. However, the audit team will review internal audit's reports and assess if there is any impact on the audit. Audit quality 38. Audit Scotland is committed to the consistent delivery of high-quality audit. Audit quality requires ongoing attention and improvement to keep pace with external and internal changes. Details of the arrangements in place for the delivery of high-quality audits is available from the Audit Scotland website. 39. The International Standards on Quality Management (ISQM) applicable to Audit Scotland for 2024/25 audits are: • ISQM (UK) 1, which deals with an audit organisation’s responsibilities to design, implement, and operate a system of quality management (SoQM) for audits. Audit Scotland’s SoQM consists of a variety of components, such as: governance arrangements and culture to support audit quality, compliance with ethical requirements, ensuring Audit Scotland is dedicated to high- quality audit through engagement performance and resourcing arrangements, and ensuring there are robust quality monitoring arrangements in place. Audit Scotland carries out an annual evaluation of its SoQM and has concluded it complies with this standard. • ISQM (UK) 2, which sets out arrangements for conducting engagement quality reviews, which are performed by senior management not involved in an audit, to review significant judgements and conclusions reached by the audit team, and the appropriateness of proposed audit opinions on high-risk audits. 91
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Other matters | 20 40. To monitor quality at an individual audit level, Audit Scotland carries out internal quality reviews on a sample of audits. Additionally, the Institute of Chartered Accountants of England and Wales (ICAEW) carries out independent quality reviews on a sample of audits. 41. Actions to address deficiencies identified by internal and external quality reviews are included in a rolling Quality Improvement Action Plan, which is used to support continuous improvement. Progress with implementing planned actions is monitored on a regular basis by Audit Scotland’s Quality and Ethics Committee. 42. Audit Scotland may periodically seek the views of South Lanarkshire Council on the quality of audit services provided. The audit team would also welcome feedback at any time. 92
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South Lanarkshire Council Annual Audit Plan 2024/25 Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 Email: info@audit.scot www.audit.scot AS.5.0 93
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South Lanarkshire Council Charitable Trusts (SC025089) Annual Audit Plan 2024/25 Prepared for South Lanarkshire Council Charitable Trust February 2025 5b 95
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South Lanarkshire Council Charitable Trust Annual Audit Plan | 2 Contents Introduction 3 Audit scope and responsibilities 4 Audit of the annual accounts 6 Wider scope and Best Value 9 Reporting arrangements, timetable and audit fee 10 Other matters 13 Accessibility You can find out more and read this report using assistive technology on our website www.audit.scot/accessibility. 96
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Introduction | 3 Introduction Purpose of the Annual Audit Plan 1. The purpose of this Annual Audit Plan is to provide an overview of the planned scope and timing of the 2024/25 audit of South Lanarkshire Council Charitable Trusts annual accounts. It outlines the audit work planned to meet the audit requirements set out in auditing standards and the Code of Audit Practice, including supplementary guidance. Appointed auditor and independence 2. Mark Ferris, of Audit Scotland, has been appointed by the Accounts Commission as external auditor of South Lanarkshire Council Charitable Trusts for the period from 2022/23 until 2026/27. The 2024/25 financial year is therefore the third of the five-year audit appointment. 3. Mark Ferris and the audit team are independent of South Lanarkshire Council Charitable Trusts in accordance with relevant ethical requirements, including the Financial Reporting Council’s Ethical Standard. This standard imposes stringent rules to ensure the independence and objectivity of auditors. Audit Scotland has robust arrangements in place to ensure compliance with ethical standards. The arrangements are overseen by the Executive Director of Innovation and Quality, who serves as Audit Scotland’s Ethics Partner. 4. The Ethical Standard requires auditors to communicate any relationships that may affect the independence and objectivity of the audit team. There are no such relationships pertaining to the audit of South Lanarkshire Council Charitable Trusts to communicate. 97
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Audit scope and responsibilities | 4 Audit scope and responsibilities Scope of the audit 5. The audit is performed in accordance with the Code of Audit Practice, including supplementary guidance, International Standards on Auditing (UK), and relevant legislation. These set out the requirements for the scope of the audit which includes: • An audit of the financial statements and an opinion on whether they give a true and fair view and are free from material misstatement. • An opinion on statutory other information published with the financial statements in the annual accounts and the Trustees Report. • Reporting on the South Lanarkshire Council Charitable Trust arrangements for securing Best Value. • Provision of an Annual Audit Report setting out significant matters identified from the audit of the annual accounts and the wider scope areas specified in the Code of Audit Practice. Responsibilities 6. The Code of Audit Practice sets out the respective responsibilities of South Lanarkshire Council Charitable Trusts and the auditor. A summary of the key responsibilities is outlined below. Auditor’s responsibilities 7. The responsibilities of auditors in the public sector are established in the Local Government (Scotland) Act 1973. These include providing an independent opinion on the financial statements and other information reported within the annual accounts and concluding on South Lanarkshire Council Charitable Trusts arrangements in place for the wider scope areas. South Lanarkshire Council Charitable Trusts responsibilities 8. South Lanarkshire Council Charitable Trusts have primary responsibility for ensuring proper financial stewardship of public funds, compliance with relevant legislation and establishing effective arrangements for governance, propriety and regularity that enables it to successfully deliver its objectives. The features of proper financial stewardship include: 98
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Audit scope and responsibilities | 5 • Establishing arrangements to ensure the proper conduct of its affairs. • Preparation of annual accounts, comprising financial statements and other information that gives a true and fair view. • Establishing arrangements for the prevention and detection of fraud, error and irregularities, and bribery and corruption. • Implementing arrangements to ensure its financial position is soundly based. • Making arrangements to secure Best Value. • Establishing an internal audit function. 99
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Audit of the annual accounts | 6 Audit of the annual accounts Introduction 9. The audit of the annual accounts is driven by materiality and the risks of material misstatement in the financial statements, with greater attention being given to the significant risks of material misstatement. This chapter outlines materiality, the significant risks of material misstatement that have been identified, and the impact these have on the planned audit procedures. Materiality 10. The concept of materiality is applied by auditors in planning and performing an audit, and in evaluating the effect of any uncorrected misstatements on the financial statements or other information reported in the annual accounts. 11. Broadly, the concept of materiality is to determine whether matters identified during the audit could reasonably be expected to influence the decisions of users of the financial statements. Auditors set a monetary threshold when determining materiality, although some issues may be considered material by their nature. Therefore, materiality is ultimately a matter of the auditor’s professional judgement. 12. The materiality levels determined for the audit of the South Lanarkshire Council Charitable Trust are outlined in Exhibit 1. Exhibit 1 2024/25 Materiality levels for South Lanarkshire Council Charitable Trusts Materiality Audited body Materiality – based on an assessment of the needs of users of the financial statements and the nature of South Lanarkshire Council Charitable Trust operations, the benchmark used to determine materiality is net assets based on the audited 2023/24 financial statements. Materiality has been set at 2 per cent of the benchmark. £23,560 100
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Audit of the annual accounts | 7 Materiality Audited body Performance materiality – this acts as a trigger point. If the aggregate of misstatements identified during the audit exceeds performance materiality, this could indicate that further audit procedures are required. Using professional judgement, performance materiality has been set at 75 per cent of planning materiality. £17,670 Reporting threshold – all misstatements greater than the reporting threshold will be reported. £1,175 Source: Audit Scotland Significant risks of material misstatement to the financial statements 13. The risk assessment process draws on the audit team’s cumulative knowledge of South Lanarkshire Council Charitable Trusts, including the nature of its operations and its significant transaction streams, the system of internal control, governance arrangements and processes, and developments that could impact on its financial reporting. 14. Based on the risk assessment process, significant risks of material misstatement to the financial statements have been identified and these are summarised in Exhibit 2, page 8. These are the risks which have the greatest impact on the planned audit approach, and the planned audit procedures in response to the risks are outlined in Exhibit 2. 15. The risk assessment process is an iterative and dynamic process. The assessment of risks set out in this Annual Audit Plan and Exhibit 2 may change as more information and evidence is obtained over the course of the audit. Where such changes occur, these will be reported to South Lanarkshire Council Charitable Trusts and those charged with governance, where relevant. 101
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Audit of the annual accounts | 8 Exhibit 2 Significant risks of material misstatement to the financial statements Risk of material misstatement Planned audit response Fraud caused by management override of controls Management is in a unique position to perpetrate fraud because of management’s ability to override controls that otherwise appear to be operating effectively. The audit team will: • Evaluate the design and implementation of controls over journal entry processing. • Make inquiries of individuals involved in the financial reporting process about inappropriate or unusual activity relating to the processing of journal entries and other adjustments. • Test journals entries, focusing on those that are assessed as higher risk. • Evaluate significant transactions outside the normal course of business. • Assess the adequacy of controls in place for identifying and disclosing related party relationships and transactions in the financial statements. Source: Audit Scotland Key audit matters 16. The Code of Audit Practice requires public sector auditors to communicate key audit matters. Key audit matters are those matters, that in the auditor’s professional judgement, are of most significance to the audit of the financial statements and require most attention when performing the audit. 17. In determining key audit matters, auditors consider: • Areas of higher or significant risk of material misstatement. • Areas where significant judgement is required, including accounting estimates that are subject to a high degree of estimation uncertainty. • Significant events or transactions that occurred during the year. 18. The matters determined to be key audit matters will be communicated in the Annual Audit Report. Exhibit 2 outlines the significant risks of material misstatement to the financial statements that have been identified, including those that have greatest impact on the planned audit procedures and require most attention when performing the audit. 102
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Wider scope and Best Value | 9 Wider scope and Best Value Introduction 19. Reflecting the fact that public money is involved, the Code of Audit Practice requires that public audit is planned and undertaken from a wider perspective than in the private sector. The wider scope audit set out by the Code of Audit Practice broadens the audit of the annual accounts to include consideration of additional aspects or risks in four wider scope areas. 20. Due to the nature and size of South Lanarkshire Council Charitable Trusts and its limited financial activity, it is considered a less complex body for the wider scope audit. Therefore, the wider scope audit does not consider all four wider scope areas and is instead limited to concluding on the financial sustainability of South Lanarkshire Council Charitable Trusts. 21. Financial sustainability means looking forward over the medium and longer term in planning the services to be delivered and how they will be delivered effectively. This is assessed by considering South Lanarkshire Council Charitable Trusts medium- to longer-term planning for service delivery. The financial sustainability of South Lanarkshire Council Charitable Trusts with be reported in the Annual Audit Report. Best Value 22. Under the Code of Audit Practice, the duty on auditors to consider the arrangements an audited body has in place to secure Best Value applies to audited bodies that fall within section 106 of the Local Government (Scotland) Act 1973, which South Lanarkshire Council Charitable Trusts does. 23. Consideration of the arrangements South Lanarkshire Council Charitable Trusts has in place to secure Best Value will be carried out alongside the wider scope audit, and a conclusion on the arrangements South Lanarkshire Council Charitable Trusts has in place will be reported in the Annual Audit Report. Significant wider scope and Best Value risks 24. No significant risks in the wider scope areas or Best Value were identified from the risk assessment process. 103
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Reporting arrangements, timetable and audit fee | 10 Reporting arrangements, timetable and audit fee Audit outputs 25. The outputs from the 2024/25 audit include: • This Annual Audit Plan. • An Independent Auditor’s Report to South Lanarkshire Council Charitable Trusts and the Accounts Commission setting out opinions on the annual accounts. • An Annual Audit Report to South Lanarkshire Council Charitable Trusts and the Accounts Commission setting out significant matters identified from the audit of the annual accounts, conclusions from the wider scope and Best Value audit, and recommendations, where required. 26. The matters to be reported in the outputs will be discussed with South Lanarkshire Council Charitable Trusts for factual accuracy before they are issued. All outputs from the audit will be published on Audit Scotland’s website, apart from the Independent Auditor’s Report, which is included in the audited annual accounts. 27. Target dates for the audit outputs are set by the Accounts Commission. In setting the target dates for the audit outputs, consideration is given to the target date for approving the annual accounts, which is 30 September 2025 for local government bodies. 28. The Independent Auditor’s Report and Annual Audit Report are planned to be issued by the target date of 30 September 2025. Audit timetable 29. Achieving the timetable for production of the annual accounts, supported by complete and accurate working papers, is critical to delivery of the audit to agreed target dates. Exhibit 3 includes a timetable for the audit, which has been agreed with management. Agreed target dates will be kept under review as the audit progresses, and any changes required, and their potential impact, will be discussed with South Lanarkshire Council Charitable Trusts and reported to those charged with governance, where required. 104
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Reporting arrangements, timetable and audit fee | 11 Exhibit 3 2024/25 audit timetable Audit activity South Lanarkshire Council Charitable Trusts target date Audit team target date Relevant committee date Issue of Annual Audit Plan 10 February 2025 10 February 2025 18 February 2025 Annual accounts: • Consideration of unaudited annual accounts by those charged with governance 25 June 2025 30 June 2025 • Submission of unaudited annual accounts and all working papers to audit team 25 June 2025 • Latest date for audit clearance meeting 25 June 2025 30 June 2025 • Issue of draft Letter of Representation, proposed Independent Auditor’s Report, and proposed Annual Audit Report • Agreement of audited and unsigned annual accounts 5 September 2025 5 September 2025 • Approval by those charged with governance and signing of audited annual accounts 12 September 2025 30 September 2025 • Signing of Independent Auditor’s Report and issue of Annual Audit Report 12 September 2025 12 September 2025 Source: Audit Scotland Audit fee 30. South Lanarkshire Council Charitable Trusts audit fee is determined in line with Audit Scotland’s fee setting arrangements. The proposed audit fee for the 2024/25 audit is set out in Exhibit 4. 105
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Reporting arrangements, timetable and audit fee | 12 31. In setting the audit fee, it is assumed that South Lanarkshire Council Charitable Trusts has effective governance arrangements in place and the complete annual accounts will be provided for audit in line with the agreed timetable. The audit fee assumes there will be no significant changes to the planned scope of the audit. Where the audit cannot proceed as planned, for example, due to incomplete or inadequate working papers, the audit fee may need to be increased. Exhibit 4 Audit fee (including VAT) Fee component1 Fee (£) External auditor remuneration 2,000 Total 2024/25 fee 2,000 Source: Audit Scotland 1 Information on the components that make up the total fee can be found in Audit Scotland’s Audit management and quality guidance. 106
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Other matters | 13 Other matters Internal audit 32. South Lanarkshire Council Charitable Trusts is responsible for establishing an internal audit function as part of an effective system of internal control. As part of the audit, the audit team will obtain an understanding of internal audit, including its nature, responsibilities, and activities. 33. While internal audit and external audit have differing roles and responsibilities, external auditors may seek to rely on the work of internal audit where it is considered appropriate. A review of internal audit’s 2024/25 audit plan was carried out to identify if there were any areas where the audit team could rely on its work. The audit team concluded it will not rely on internal audit’s work. However, the audit team will review internal audit's reports and assess if there is any impact on the audit. Audit quality 34. Audit Scotland is committed to the consistent delivery of high-quality audit. Audit quality requires ongoing attention and improvement to keep pace with external and internal changes. Details of the arrangements in place for the delivery of high-quality audits is available from the Audit Scotland website. 35. The International Standards on Quality Management (ISQM) applicable to Audit Scotland for 2024/25 audits are: • ISQM (UK) 1, which deals with an audit organisation’s responsibilities to design, implement, and operate a system of quality management (SoQM) for audits. Audit Scotland’s SoQM consists of a variety of components, such as: governance arrangements and culture to support audit quality, compliance with ethical requirements, ensuring Audit Scotland is dedicated to high- quality audit through engagement performance and resourcing arrangements, and ensuring there are robust quality monitoring arrangements in place. Audit Scotland carries out an annual evaluation of its SoQM and has concluded it complies with this standard. • ISQM (UK) 2, which sets out arrangements for conducting engagement quality reviews, which are performed by senior management not involved in an audit, to review significant 107
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Other matters | 14 judgements and conclusions reached by the audit team, and the appropriateness of proposed audit opinions on high-risk audits. 36. To monitor quality at an individual audit level, Audit Scotland carries out internal quality reviews on a sample of audits. Additionally, the Institute of Chartered Accountants of England and Wales (ICAEW) carries out independent quality reviews on a sample of audits. 37. Actions to address deficiencies identified by internal and external quality reviews are included in a rolling Quality Improvement Action Plan, which is used to support continuous improvement. Progress with implementing planned actions is monitored on a regular basis by Audit Scotland’s Quality and Ethics Committee. 38. Audit Scotland may periodically seek the views of South Lanarkshire Council Charitable Trusts on the quality of audit services provided. The audit team would also welcome feedback at any time. [ 108
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South Lanarkshire Council Charitable Trusts Annual Audit Plan 2024/25 Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 Email: info@audit.scot www.audit.scot AS.5.0 109
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 18 February 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Global Internal Audit Standards 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] set out the requirements and responsibilities of the new Global Internal Audit Standards, Application Note: Global Internal Audit Standards in the UK Public Sector and the draft Code of Practice for the Governance of Internal Audit in UK Local Government applicable from 1 April 2025 [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- [rec (1) that that the requirements and responsibilities of the new Global Internal Audit Standards, Application Note: Global Internal Audit Standards in the UK Public Sector and the draft Code of Practice for the Governance of Internal Audit in UK Local Government applicable from 1 April 2025 be noted. s] 3. Background 3.1. Internal Audit within South Lanarkshire Council forms part of the Council’s wider governance framework. In previous years, the function has operated within the context of an Internal Audit Charter and a set of internal audit standards known as the Public Sector Internal Audit Standards. From 1 April 2025, these Standards will be replaced by the Global Internal Audit Standards. These standards were issued by the Internal Audit Standards Board and endorsed by the Institute of Internal Auditors. 4. Global Internal Audit Standards Background 4.1. As an audit committee, the Risk and Audit Scrutiny Committee has a key role to play in ensuring that the internal audit function adheres to the Standards and fulfils its mandate effectively and efficiently. To do this the Risk and Audit Scrutiny Committee must be familiar with the new Standards and their implications. 4.2. This report provides a summary of the Standards and links to documents are provided within the List of Background Papers at the end of the report. 4.3. The Standards are supplemented by two documents. Firstly, a draft Code of Practice for the Governance of Internal Audit in Local Government. This Code addresses the responsibilities of senior management and the audit committee towards internal audit to ensure that the internal audit function have the necessary authority, support and oversight of the organisation. The Code provides a link between the recommended 6 111
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practices in the Global Internal Audit Standards and established governance arrangements of local government bodies and reflects the legislation and practices of local government bodies. See 4.6 (3) below. 4.4. The other additional document is an application note that will assist with the implementation of the Global Internal Audit Standards by addressing areas where interpretation or adjustments are required for the public sector. The Application Note: Global Internal Audit Standards in the UK Public Sector has been issued by the Relevant Internal Audit Standard Setters and sets out interpretations and requirements which need to be applied to the Global Internal Audit Standards, in order that these form a suitable basis for internal audit practice in the UK public sector. 4.5. From an organisational perspective, the core principles of Internal Audit, codes of ethics, standards and guidance are now incorporated within a single Standard. These Standards provide confidence that a quality internal audit service, based on conformance with standards, delivers assurance alongside advice, insight, oversight and foresight. The role of the internal audit function is envisaged as one that enhances an organisation’s ability to serve the public interest. 4.6. The Standards are based on 15 core principles and set out across five ‘domains’:- 1. Purpose of Internal Auditing: defined by the domain as being to strengthen the organisation’s ability to create, protect, and sustain value by providing independent, risk-based, and objective assurance, advice, insight, and foresight. 2. Ethics and Professionalism: this domain focuses on integrity, objectivity, competence, confidentiality and due professional care. Specific reference is made to ‘professional courage’ which is defined as communicating truthfully and taking appropriate action when confronted with dilemmas and difficult situations requiring the exercise of ‘professional scepticism’. 3. Governance of the Internal Audit function: this domain covers independence and the requirements for oversight and authorisation of the work of Internal Audit by those charged with governance. Roles and responsibilities are set out in the Code of Practice for the Governance of Internal Audit in UK Local Government and are reflected in a mandate that was, in broad terms, subsumed within the previous Internal Audit Charter. An extract from the draft Code of Practice for the Governance of Internal Audit in UK Local Government is included at Appendix One. 4. Managing the Internal Audit function: this domain sets out a required strategic approach to planning, involving extensive consultation and for resourcing constraints to be addressed within the Audit Charter. There is a requirement to adopt a risk-based approach that places equal emphasis on performance and value as well as conformance. 5. Performing Internal Audit Services: this domain defines the standards that should be applied when conducting all aspects of an audit assignment. Linked to the prioritisation of ‘value added’ is now the need to report audit findings in terms of significance, likelihood and impact, providing an engagement ‘conclusion’ as opposed to an ‘opinion’. 4.7. Compliance with the Standards continues to be a self-assessment exercise (with a periodic independent external inspection) and for this to be reported on an annual basis. Within South Lanarkshire Council, the outcome of this first self-assessment 112
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exercise will be reported within the 2025/2026 Annual Assurance Report with the first external assessment anticipated to be in 2027/2028. Summary of Main Changes 4.8. Many aspects of how the function undertakes audits and the principles under which it operates will not change, with current arrangements reflecting the intent of the new Standards and best practice. 4.9. The Global Internal Audit Standards, however, formalise some requirements and there are several key changes. These include:- a new Purpose statement a requirement for internal auditors to demonstrate ‘professional scepticism’ clearer roles and responsibilities for senior management and the audit committee development and approval of an Internal Mandate and Charter development and implementation of an audit strategy oversight of wider assurance sources development of skills and technology within the function to ensure delivery of an effective internal audit service a requirement to report where recommendations are not agreed a requirement for formal review processes 4.10. The current audit process is being reviewed to ensure this fully complies. An action plan is being developed as required. Internal Audit Mandate and Charter 4.11. One new requirement set out within the Global Internal Audit Standards is the development of an Internal Audit Mandate and Charter. The revised Charter requires a focus on the mandate under which the function operates. Specifically, this section of the Charter sets out the authority as well as the principle of independence (in terms of the function’s organisational position and reporting relationships). The Charter also sets out roles, responsibilities and expectations regarding management support of the internal audit service. As those charged with governance, the Global Internal Audit Standards require this ‘mandate’ to be granted by the Council’s audit committee. 4.12. Circumstances may require either or both the Internal Audit Mandate or elements of the Internal Audit Charter to be amended or updated. This could be because of a significant change in the Global Internal Audit Standards or material changes in organisational structure, operational environment or new laws or regulations that impact on the nature and scope of internal audit services within South Lanarkshire Council. 4.13. Where such a revision is required, an updated Internal Audit Mandate and Charter will be presented to the Risk and Audit Scrutiny Committee and senior management for approval. Audit Strategy 4.14. Separately, The Chief Internal Auditor is required to develop an Audit Strategy that that underpins the annual Internal Audit Plan and supports the strategic objectives of the organisation. 4.15. Both the Mandate and Charter and the Audit Strategy are presented along with the Internal Audit Plan for approval as part of a separate report on this meeting’s agenda. 113
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Role of the Audit Committee 4.16. The role of audit committees is set out in some detail in Domain Three “governance of the Internal Audit function”, the main elements of which are to:- provide the mandate setting out the authority, role and responsibilities under which Internal Audit operates obtain assurance that Internal Audit is fulfilling its mandate review and approve the internal audit charter as reflecting the Committee’s expectations of the internal audit service that will be delivered within the Council meet with the Chief Internal Auditor on a periodic basis ‘champion’ and demonstrate support for Internal Audit (see 1.3 Appendix 1) review the governance, management and reporting arrangements of the internal audit function assist with setting audit priorities review and approve arrangements for the external assessment 4.17. The latest external assessment of the function’s compliance with the Public Sector Internal Audit Standards provided the Risk and Audit Scrutiny Committee with assurance that the function operated to expected professional standards. This level of conformance provides a good foundation to transition to the new Standards. Work to progress compliance with the new Global Internal Audit Standards has continued throughout 2024/2025 and time has been allowed in the 2025/2026 Internal Audit Plan to fully imbed all requirements of the Standards within the function’s activities. 4.18. The 2025/2026 Internal Audit Plan is the first evidence of the application of the new Standards and is being presented alongside an updated Mandate and Charter and Audit Strategy. Audit assignments undertaken in 2025/2026 and the Annual Report for this year (and going forward) will also reflect the requirements of the new Standards. As the year progresses, the Risk and Audit Scrutiny Committee, will receive routine updates within activity reports on progress with complying with the new Standards. 4.19. The Committee is asked to note the requirements and responsibilities of the new Global Internal Audit Standards, Application Note: Global Internal Audit Standards in the UK Public Sector and the draft Code of Practice for the Governance of Internal Audit in UK Local Government and that these are applicable from 1 April 2025. 5. Employee Implications 5.1. The Global Internal Audit Standards will require a further review of current audit processes. The Service already operates with integrity, objectivity and competency respecting confidentiality and operating with due professional care. The Internal Audit team operate within the Council’s Code of Conduct as well as that of their respective accountancy body’s code of ethics. Continuous professional development and training will further support the embedding of the new Standards across the internal audit service. 6. Financial Implications 6.1. There are no financial implications attached to the implementation of the new Standards. 7. Other Implications 7.1. There are no other implications. 114
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8. Integrated Impact Assessment and Consultation Arrangements 8.1. There is no requirement to conduct an integrated impact assessment on the implementation of the new Standards. Jackie Taylor Executive Director (Finance and Corporate Resources) 28 January 2025 Link(s) to Council Values/Priorities/Outcomes Accountable, effective, efficient and transparent Previous References none List of Background Papers Global Internal Audit Standards Draft Code of Practice for the Governance of Internal Audit in UK Local Government Application Note: Global Internal Audit Standards in the UK Public Sector Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Yvonne Douglas Internal Audit Manager Ext: 2618 (Tel: 01698 452618) E-mail: yvonne.douglas@southlanarkshire.gov.uk 115
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Appendix 1 Extract from draft Code of Practice for the Governance of Internal Audit in UK Local Government Code 1. Providing authority for internal audit 1.1 Internal audit’s mandate To be effective and to meet the requirements of professional standards, internal audit’s authority needs to be established. In local government in the UK, internal audit’s authority has statutory backing through the regulations issued by national UK governments. Authorities should familiarise themselves with the appropriate regulations that apply to them (see Appendix A). Regulations also include internal audit’s rights of access. In GIAS (UK public sector) this is referred to as internal audit’s mandate, so the primary mandate comes from the regulations. In addition to internal audit’s mandate from regulations, each body may agree a wider statement of internal audit’s authority. In developing the mandate with the chief audit executive, senior management should consider their wider assurance framework. The framework ensures that those responsible for governance and the audit committee receive the assurances they need, including assurance from first and second lines, and clarifies how internal audit contributes. Development of the mandate will involve the chief audit executive, senior management and the audit committee. If the audit committee has the delegated power, it must approve the mandate. Alternatively, the audit committee should recommend approval to those charged with governance. If there are changes to the regulations, the mandate must be updated to reflect them. 1.2 Internal audit’s charter The chief audit executive has a responsibility to prepare a charter that conforms with GIAS (UK public sector). When reviewing the charter, the audit committee should be satisfied that it covers the governance arrangements for internal audit. It must include the mandate derived from the regulations, plus any additional agreed mandate, and include internal audit’s reporting line to the audit committee. The charter should include the administrative reporting arrangements for internal audit and the chief audit executive. Senior management must work with the chief audit executive to ensure that the charter sets out the arrangements the function needs to achieve internal audit’s purpose. In local government, internal audit’s role would normally include: Supporting the delivery of the authority’s strategic objectives by providing risk-based and objective assurance on the adequacy and effectiveness of governance, risk management and internal controls. Championing good practice in governance through assurance, advice and contributing to the authority’s annual governance review. Access to the authority's collaborative and arm’s-length arrangements. If the audit committee has the authority, it must approve the charter; alternatively it should 116
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recommend approval to those charged with governance. Where there are significant changes to the governance of the authority, its risks or the internal audit function, the charter must be reviewed to ensure it is still fit for purpose and new formal approval given. A regular review is recommended to confirm the charter or update as required. 1.3 Support for internal audit Internal audit’s activities require access to and support from senior management, the audit committee and those charged with governance. Support allows internal audit to apply their mandate and charter in practice and meet expectations. Support means: Championing the role and work of internal audit to the staff within the authority and to partner organisations with whom internal audit will work. Facilitating access to senior management, the audit committee and the authority’s external auditor. Assisting, where possible, with access to external providers assurance such as regulators, inspectors and consultants. Engaging constructively with internal audit’s findings, conclusions and advice. Building awareness and understanding of the importance of good governance, risk management and internal control for the success of the authority, and of internal audit’s contributions. Support also means putting in place conditions to enable its work: ♦ When senior management and those charged with governance agree organisational structures, they must ensure that the reporting line of the chief audit executive is not lower than a member of the senior management team and has access to all members of the team. ♦ Where internal audit is outsourced or delivered through a partnership arrangement, senior management and those charged with governance should ensure there is a nominated chief audit executive, and client responsibility lies with a member of senior management. The audit committee can demonstrate its support for internal audit by: Enquiring of senior management and the chief audit executive about any restrictions on the internal audit’s scope, access, authority or resources that limit its ability to carry out its responsibilities effectively. Considering the audit plan or planning scope, and formally approving or recommending approval to those charged with governance. Meeting at least annually with the chief audit executive in sessions without senior management present. 2. Positioning internal audit independently On behalf of those charged with governance and the audit committee, senior management establishes and protects the internal audit function’s independence and qualifications. 2.1 Organisational independence On behalf of those charged with governance, senior management need to establish and safeguard internal audit’s independence. These arrangements must include: ♦ Ensuring internal audit’s access to staff and records, as set out in regulations and the charter, operates freely and without any interference. 117
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♦ Ensuring that the chief audit executive reports in their own right to the audit committee on the work of internal audit. ♦ Providing opportunities for the chief audit executive to meet with the audit committee without senior management present. ♦ Where there are actual or potential impairments to the independence of internal audit, senior management should work with the chief audit executive to remove or minimise them or ensure safeguards are operating effectively. ♦ Recognise that if the chief audit executive has additional roles and responsibilities beyond internal auditing, or if new roles are proposed, it could impact on the independence and performance of internal audit. The impact must be discussed with the chief audit executive and the views of the audit committee sought. Where needed, appropriate safeguards must be put in place by senior management to protect the independence of internal audit and support conformance with professional standards. In local government, matters around the appointment, removal, remuneration and performance evaluation of the chief audit executive will be undertaken by senior management, but these arrangements must not be used to undermine the independence of internal audit. The audit committee should provide feedback on the proposed job description and the performance evaluation of the chief audit executive should include feedback from the chair of the audit committee. The audit committee must support internal audit’s independence by reviewing the effectiveness of safeguards at least annually, including any issues or concerns about independence from the chief audit executive. The chief audit executive must have the right of access to the chair of the audit committee at any time. The audit committee can escalate its concerns about internal audit independence to those charged with governance. 2.2 Qualifications of the chief audit executive Ensuring effective leadership of the internal audit team requires a suitably qualified and experienced chief audit executive. The GIAS (UK public sector) sets out the qualification of and competencies expected of the chief audit executive. These must be taken into account by senior management when recruiting to the post. Where internal audit is fully outsourced, senior management should ensure that an appropriate individual from the provider is nominated as the chief audit executive and meets the qualification requirements. 3. Oversight of internal audit To ensure the effectiveness of internal audit, it should be overseen by the audit committee on behalf of those charged with governance. Some local authorities in the UK have legislation or statutory guidance on the responsibilities of their audit committees. CIPFA has established recommended practice for audit committees in local government and police, the Position Statement: audit committees in local authorities and police 2022 and its supporting guidance publication, Audit committees: practical guidance for local authorities and police (2022). The following principles are consistent with their recommended practices for the oversight of internal audit. 118
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3.1 Audit committee interaction All audit committees should follow the CIPFA audit committee guidance for the oversight of internal audit. To ensure there is good interaction between the audit committee and internal audit, audit committees must agree its work plan with the chief audit executive to ensure there is appropriate coverage of internal audit matters within audit committee agendas. The audit committee workplan should provide for the internal audit mandate and charter, strategy, plans, engagement reporting and the annual conclusion, and quality reports. The audit committee must familiarise itself with the authority’s assurance framework, governance, risk management and internal control arrangements to facilitate its interactions with internal audit. Senior management should engage with the audit committee on significant changes to governance, risk and control arrangements and any concerns they may have on assurance. The audit committee should have oversight of the annual governance statement before final approval. Audit committee familiarity with these will support their effective interaction with internal audit. Where there is disagreement about the management of risks or agreed audit actions between internal audit and senior management, the audit committee must review and make their recommendation to either management or those charged with governance. 3.2 Resources The audit committee and senior management must engage with the chief audit executive to review whether internal audit’s financial, human and technological resources are sufficient to meet internal audit’s mandate as set out in the regulations and achieve conformance with GIAS (UK public sector). Where there are concerns about internal audit’s ability to fulfil its mandate or deliver an annual conclusion, the concerns should be formally recorded and reported to those charged with governance. If resource issues result in a limitation of scope on the annual conclusion, this should also be reported and disclosed in the annual governance statement. Decisions on internal audit resourcing by senior management and those charged with governance must take account of the longer-term risks to the governance and financial sustainability of the authority and internal audit’s role in supporting those objectives. Where there are temporary resource constraints, senior management must work with the chief audit executive to establish longer-term plans for sustainable internal audit resources. 3.3 Quality Annually, the audit committee must review the results of the chief audit executive’s assessment of conformance against GIAS (UK public sector), including any action plan. The audit committee must review the chief audit executive’s annual report, including the annual conclusion on governance, risk management and control, and internal audit’s performance against its objectives. To meet the requirements of the regulations (the mandate) for internal audit, the audit committee must satisfy itself on the effectiveness of internal audit. They should take into 119
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account conformance with the standards, interactions with the committee, performance and feedback from senior management. Their conclusions should be reported to those charged with governance, for example, as part of the audit committee’s annual report. 3.4 External quality assessment On behalf of those charged with governance and the audit committee, senior management must ensure that internal audit has an external quality assessment at least once every five years of its conformance against GIAS (UK public sector), including this Code. Senior management and the chief audit executive should discuss the timing of the review and report the options and their recommendation to the audit committee. The proposals for the scope, method of assessment and assessor should be brought to the audit committee for agreement. The assessor must use this Code alongside the standards and be familiar with the sector. The audit committee must receive the complete results of the assessment and consider the chief audit executive’s action plan to address any recommendations. Progress should be monitored. Where the audit committee does not have delegated authority, the committee should report the overall results of the external quality assessment to those charged with governance. 120
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 18 February 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Internal Audit Activity as at 24 January 2025 1. Purpose of Report 1.1. The purpose of the report is to:- update the Risk and Audit Scrutiny Committee (RASC) on progress of the Internal Audit service in the period 1 November 2024 to 24 January 2025 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- (1) that progress be noted. 3. Background 3.1. Findings from internal audit assignments are reported to the Committee throughout the year. The last progress report to the Committee was in November 2024 and reported on work completed in the period 31 August to 31 October 2024. This report covers all work completed in the period 1 November 2024 to 24 January 2025. Performance information is also included. 4. Delivery of the Internal Audit Plan: Progress and Performance 4.1. As at 24 January 2025, 98% of the 2024/2025 Audit Plan is in progress with only one assignment in relation to the annual update of fraud risk registers still to commence. Of the 98% of the Plan that is in progress, 34% are at draft report stage with a further 24% relating to assignments that run throughout the year and will be closed at 31 March 2025. The remaining 40% relate to assignments that are in progress. Plans are in place to conclude all assignments to draft report stage ahead of the 2024/2025 Annual Assurance Report being presented to the Risk and Audit Scrutiny Committee in June 2025. 4.2. Appendix 1 lists all assignments completed in the period 1 November 2024 to 24 January 2025 together with a summary of overall assurances from each area of work. 4.3. Key performance indicators for the period to 31 December 2024 are included at Appendix 2. 7 121
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4.4. Members are asked to note progress. 5. Global Internal Audit Standards 5.1. The Internal Audit function within South Lanarkshire Council will continue to comply with the Public Sector Internal Audit Standards in its delivery of an internal audit service in 2024/2025. 5.2. Preparatory work is underway to ensure that the internal audit function complies with the new Global Internal Audit Standards which apply from 1 April 2025. A detailed report around requirements and responsibilities, set out within the new Standards, is a separate item on the Committee’s agenda. 6. Progress against Strategy 6.1. The Public Sector Internal Audit Standards require progress against the audit strategy to be monitored and reported to the Committee as part of regular monitoring reports that are presented at each meeting. 6.2. Delivery of the strategy in 2024/2025 will be evidenced by the completion of the Internal Audit Plan in-year and will be monitored through the performance indicators regularly reported to the Committee. 7. Employee Implications 7.1. There are no employee issues. 8. Financial Implications 8.1. A breakeven position for 2024/2025 is forecast at the end of the financial year for the Internal Audit section. 9. Other Implications 9.1. The main risks to the delivery of the Audit Plan are, generally, vacancies and team up-skilling requirements, unforeseen service demands and delays with client sign-off. These are mitigated by coaching and training, regular meetings and escalation processes as well as inclusion of contingency time within the annual plan. The risk of significant, subsequent amendments to the Plan, arising from a change in the Council’s priorities or risks, are mitigated by regular re-assessment of capacity and Audit Plan content to allow incremental adjustments as the year progresses. 9.2. There are no implications for sustainability in terms of the information contained in this report. 10. Integrated Impact Assessment and Consultation Arrangements 10.1. There is no requirement to conduct an integrated impact assessment for the contents of the report. 10.2. Heads of Service are consulted on each and every audit assignment. Jackie Taylor Executive Director (Finance and Corporate Resources) 24 January 2025 122
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Link(s) to Council Values Accountable, effective, efficient and transparent Previous References Risk and Audit Scrutiny Committee -2024/2025 Internal Audit Plan, 26 March 2024 Risk and Audit Scrutiny Committee - Internal Audit Activity as at 31 October 2024, 19 November 2024 List of Background Papers Figtree extracts of Action Plans Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Yvonne Douglas, Audit and Compliance Manager Ext: 2618 (Tel: 01698 452618) E-mail: yvonne.douglas@southlanarkshire.gov.uk 123
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Assignments completed 1 November 2024 to 24 January 2025 Appendix 1 Job Number Assignment name Draft Issue Final Issue Assurance Info I342118 Self-Directed Support 19/11/2024 19/11/2024 Assignment deferred until new system implemented 2025/2026. Time included within the 2025/2026 Internal Audit Plan. I350123 Governance Statement 31/12/2024 31/12/2024 Review and update of the governance self- assessment checklist for 2024/2025. I541025 Housing System 24/01/2025 24/01/2025 Time carried forward to 2025/2026 to align to project implementation plan. I541026 Social Work System 24/01/2025 24/01/2025 Time carried forward to 2025/2026 to align to project implementation plan. I541027 Fusion Licences 22/01/2025 22/01/2025 Analysis completed and reported to the Fusion Strategy Board. I615220 Pupil Equity Fund 29/11/2024 17/12/2024 See Appendix 3 for Key Messages. In addition to the recent audit testing that Internal Audit undertook in relation to Pupil Equity Funding (PEF), data- analysis work in 2024/2025 has provided Education Resources with: 1 PEF spend analysis that facilitates the identification of patterns of spend that would benefit from further investigation – this can help Education Resources to obtain assurances that schools are following South Lanarkshire Council’s procurement and accounting requirements when 124
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incurring PEF spend. 2. a PEF spend data “dashboard” that facilitates the analysis of PEF spend using the indicators. I615228 Fraud Reporting 24/01/2025 24/01/2025 Provision of reports to Committee. I674222 Direct Payment Review 05/11/2024 05/11/2024 Investigation completed and issue resolved with service user. I823045 Committee Reporting 24/01/2025 24/01/2025 Provision of reports to Committee. Job Number Assignment name Draft Issue Final Issue Assurance Info External Clients I916243 SLLC Data Analytics 05/11/2024 16/12/2024 Reported to SLLC. I943262 IJB Consultation Process 28/10/2024 26/11/2024 Reported to IJB. 125
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Key audit performance indicators as at 31 December 2024 Appendix 2 Indicator Numbers Percentage Target Comment Assignments delivered within budget 14/14 100% 80% Draft reports delivered within 6 weeks of file review 14/14 100% 80% 2024/2025 Audit Plan completed to draft by 30 April 2025 17/50 34% 100% 49/50 (98%) of 2024/2025 Audit Plan in progress at 31 December 2024. Internal Audit recommendations delivered on time 8/8 100% 90% Client to agree findings and actions within 4 weeks of draft issue 14/14 100% 80% 126
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I615220 Pupil Equity Fund Appendix 3 Key Messages Background and Objective The Scottish Government has initiatives in place to try and close the attainment gap in Scottish schools, particularly where this is as a result of poverty and, in this respect, Pupil Equity Funding (PEF funding) is being allocated directly to Head Teachers on an annual basis to help them address the poverty related attainment issues in their school. In respect of this PEF funding, Head Teachers are asked to prepare a plan of action on how they will spend this money to benefit their pupils and how this spending will contribute to increased attainment, over time. They need to track progress to demonstrate that they are spending the monies in line with their plan and that they are achieving the outcomes they intended from spending in that way. They need to keep stakeholders informed and involved. If there is not good governance of the PEF spend within the school, there are real risks that the monies are not used in the best way or that there is a lack of transparency or audit trail to evidence what is being spent where and why. As such, the objective of audit work in this area was to review the governance arrangements in a sample of schools (planning, approval and monitoring of spend in line with plans, and tracking of improvements in line with the objectives set out in the plans). The audit sought assurances that there was sufficient audit trail in each of the key governance / control areas to demonstrate the action taken and that this was in line with guidance. Summary Findings Audit Opinion The key findings in each of the scope areas and any recommended improvement action are as follows: Guidance – there is local guidance in place for teachers that compliments the national guidance. There are some minor recommendations made to strengthen this guidance. Planning – sample schools are preparing school improvement plans that outline objectives for addressing attainment gaps and involving stakeholders in this planning. Separately, they are preparing a “profile of spend” report which is the detailed plan of how each year’s allocation of PEF funds will be spent. In regard to the Participatory Budget element of the PEF allocation there was good collaboration with students, parents, and teachers as to where this element of PEF was to be spent on. However, the strategic and financial plans do not always directly correlate to each other in a transparent way (generally this is a more indirect correlation) and this can make it difficult to correlate the specific benefits of PEF spend to expected outcomes and it may be prudent to consider how alignment can be better demonstrated. Approval of PEF spend – there are many invoices associated with supplier spend using PEF funds in any one year and although there was generally back-up available to support this spend there were occasions where the school could not provide the documentation requested. Schools should be reminded of the need to retain complete audit trail to support PEF spend. Monitoring spend/outcomes and reporting to stakeholders – schools are monitoring their PEF spend and liaising with Education Resources (Finance, CTOs and CQIS). Tracking against defined measures is demonstrating improvements in attainment but, the specific interventions that contributed to the improvement is not always clear. Schools are 127
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reporting to stakeholders and Education Resources are reporting timeously to the Scottish Government. In addition to the findings above, it was noted that there are many areas where PEF funding is being used. The scope of the audit was not to examine if these were correct, but simply to provide analysis (which can support identification of potential anomalies that can be investigated further when deemed necessary). Audit opinion On the basis of these findings, it is Internal Audit’s opinion that a reasonable level of assurance has been obtained that expected governance controls are generally in place regarding planning, monitoring and approval of PEF expenditure although some improvement action has been recommended to help Education Resources to strengthen their guidance and improve audit trail and the correlations between financial and strategic plans. 128
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 18 February 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Fraud Statistics Six Monthly Update 2024/2025 1. Purpose of Report 1.1. The purpose of the report is to:- provide a summary of the fraud statistics for the six months to 30 September 2024 and a comparison to the same period in 2023 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- (1) that the contents of the report be noted. 3. Background 3.1. Collating and reporting fraud statistics and setting targets for improvement are considered best practice by the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Association of Local Authority Risk Managers (ALARM). 3.2. This report provides information on the number, types and outcomes of fraud investigations within South Lanarkshire Council (SLC) for the six month period to 30 September 2024 together with a comparison to the statistics for the same period in 2023. It includes all frauds reported to Internal Audit, benefit frauds during this period passed to the Department for Work and Pensions (DWP) for investigation and insurance losses resulting from a failure in internal controls or which have been investigated by Internal Audit. 3.3. Although the responsibility for housing benefit fraud investigations has transferred to the DWP Fraud and Error Service (FES), SLC retains responsibility for the recovery of fraud overpayments from their own Housing Benefit claimants. Housing Benefit fraud data will, therefore, continue to be included within the fraud statistics reported, as information is provided by FES. 3.4. Benefits and Revenue continue to deliver an annual programme of rolling reviews on Housing Benefit claimants based on risk-profiling to establish the most likely areas of benefit fraud or overpayment. Information is also obtained from His Majesty's Revenue and Customs (HMRC) through the Verification of Earnings and Pensions arrangement, from DWP through the Housing Benefit Matching Service and from data gathered through the National Fraud Initiative. Where fraud is suspected, the case will be passed to FES for investigation and, if proven, returned to SLC to pursue recovery. Irrespective of whether a fraud is proven or not, the Council takes steps to recover any overpayment. 8 129
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4. Results 4.1. All concerns reported to Internal Audit are risk assessed with high risk areas investigated by Internal Audit, medium risks investigated by Resources and low risks registered for monitoring of trends. Internal Audit may also undertake joint investigations with Resources and the Fact-Finding team within Personnel Services depending on the nature of the fraud and the operational knowledge required. 4.2. Areas within the Council that have an inherently higher risk of fraud are considered for inclusion in the Annual Audit Plan. There have been no new patterns or trends identified in 2024/2025. 4.3. An analysis of the fraud caseload for the six months to 30 September 2024 and the comparative period in 2023 is detailed in Table 1:- Table 1 - Fraud Caseload Status Six Months to 30/09/24 Six Months to 30/09/23 Nos. £000 Nos. £000 Cases open as of 1 April 171 44 136 70 Concerns reported during financial year 271 8 68 27 SLC caseload for the year 198 52 204 97 Cases closed in period (see Table 2) 13 14 47 33 Work in progress at 30 September 185 38 157 64 4.4. DWP referrals made to the Council have been excluded to ensure data reflects only the SLC-managed element of the caseload. For completeness, potential frauds identified by the DWP, and relating to SLC, are reported separately (see paragraph 4.5 below). 4.5. Concerns reported in the first six months were relatively low with cases coming primarily from suspected benefit fraud and whistle-blowing allegations. In addition to those cases summarised above, a further 35 SLC investigations are being progressed by the DWP with a potential cumulative housing benefit overpayment/fraud value of around £50,000. On conclusion of investigations, SLC will seek repayment in line with standard recovery procedures. 4.6. An analysis of closed cases in the year is detailed in Table 2:- Table 2 - Analysis of Closed Cases Source of fraud Six Months to 30/09/24 Six Months to 30/09/23 Nos. £000 Nos. £000 Founded allegation (see Table 3) 10 7 11 31 Insufficient information 1 0 1 2 Unfounded allegations 2 7 11 0 Time Delay 0 0 24 0 Total 13 14 47 33 4.7. An analysis of founded allegations is detailed in Table 3:- 1 includes one case where work to ascertain value is still in progress 130
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Table 3 – Analysis of Founded Allegations Source of fraud Six Months to 30/09/24 Six Months to 30/09/23 Nos. £000 Nos. £000 External 10 7 10 31 Internal 0 0 1 0 Benefits 0 0 0 0 Total 10 7 11 31 5. Improvements 5.1. Services work with the Security Coordinator or with Internal Audit to review and address gaps in controls identified during the investigation of cases. Where appropriate, improvement plans are agreed with the relevant Heads of Service and the actions followed up by Internal Audit to ensure implementation. Outcomes for concluded investigations are reported to the Committee as part of Internal Audit’s annual assurance report. 6. Employee Implications 6.1. The Council has a zero tolerance approach to fraud. Manager and employee roles and responsibilities are set out in SLC’s Counter Fraud, Bribery and Corruption Policy. 7. Financial Implications 7.1. The investigation of fraud, participation in the National Fraud Initiative (NFI) exercise and the collection and reporting of fraud statistics is carried out within existing resources. The 2024/2025 Internal Audit Plan includes 170 days to manage the NFI exercise, disseminate fraud alerts, update fraud risk registers and undertake anti- fraud assignments and fraud investigations. 8. Other Implications 8.1. Fraud risk is recognised as one of the top risks facing SLC. This risk is significant as it can adversely affect the delivery of Council objectives and erode valuable resources. It is, therefore, important that the risk of fraud is soundly managed. Fraud Risk Registers are in place within all Resources and are reviewed and updated annually in line with standard Risk Management procedures. Periodic self- assessment exercises against good practice guidance in fraud management inform these updates. 8.2. The Council’s Serious and Organised Crime (SOC) working group progress delivery of various anti-fraud actions, revising if any new or emerging threats are identified through the pan Lanarkshire Multi Agency SOC Group. Updates on progress are presented to the Committee on a periodic basis and will also be included in the annual fraud statistics report. 8.3. The collection and reporting of fraud statistics assists in the management of fraud by identifying patterns and trends of fraud and areas of high risk where preventative controls should be concentrated. However, in order to do this effectively, fraud statistics must be complete. Internal Audit will continue to highlight areas where practice could be improved to ensure that all instances of potential and actual fraud are reported to Internal Audit. 9. Integrated Impact Assessment and Consultation Arrangements 9.1. There is no requirement to undertake an integrated impact assessment. 131
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9.2. Consultation was not necessary for this report. Jackie Taylor Executive Director (Finance and Corporate Resources) 22 January 2025 Link to Council Values/Priorities/Outcomes Accountable, Effective, Efficient and Transparent Previous References Risk and Audit Scrutiny Committee, 24 September 2024 List of Background Papers None Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Yvonne Douglas, Audit and Compliance Manager Ext: 2618 (Tel: 01698 452618) E-mail: yvonne.douglas@southlanarkshire.gov.uk 132
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 18 February 2025 Report by: Chief Executive Subject: Performance and Review Scrutiny Forum - Annual Update for 2024 1. Purpose of Report 1.1. The purpose of the report is to: [purpose] provide, for information, a summary of the reports considered by the Performance and Review Scrutiny Forum during the period January to December 2024 [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s): [recs] (1) that the content of this report be noted. [1recs] 3. Background 3.1. The Terms of Reference and Powers and Responsibilities for the Performance and Review Scrutiny Forum includes consideration of the council’s response to Best Value, improvement and performance management. 3.2. The details within this report provide the Risk and Audit Scrutiny Committee with a summary of business reported to the Performance and Review Scrutiny Forum. 4. Agenda items 4.1. The table below notes the reports submitted to the Performance and Review Scrutiny Forum during 2024 under the main areas of responsibility. Date Report Topic 19 March • Local Government Benchmarking Framework 2022/2023 results and action plan • Accounts Commission New Approach to the Audit of Best Value – initial reports • Best Value in Scotland • Scottish Household survey key findings • Performance Management • Best Value • Best Value • Performance Management 28 May • Local Government Benchmarking Framework Overview Report 2022/2023 • Accounts Commission New Approach to the Audit of Best Value – Falkirk and Moray Councils • Local Government Benchmarking Framework – Dashboard Development • Performance Management • Best Value • Performance Management 9 133
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27 August • Council Plan Connect Quarter 4 progress report 2023/2024 • Annual performance spotlights 2023/2024 • South Lanarkshire Council/South Lanarkshire Leisure and Culture – Vision for future relationships • Cross-cutting reviews - update • Performance Management • Performance Management • Improvement • Improvement 19 November • Council Plan Connect Quarter 2 progress report 2024/2025 • Resource Plans: Red and Amber results at Quarter 2 2024/2025 • Local Government Benchmarking Framework 2022/2023 results and action plan - Update • Transformational reviews: Cross-cutting – Update • Review of Routes to Work South • Agile working guidance • Corporate Standards • Performance Management • Performance Management • Performance Management • Improvement • Improvement • Improvement • Improvement 4.2. A schedule of reporting will continue covering the key themes noted at paragraph 3.1 above. The Risk and Audit Scrutiny Committee will be provided with an annual report for information, advising it of the business presented to the Performance and Review Scrutiny Forum. 5. Employee Implications 5.1. There are no employee implications relating to this report. 6. Financial Implications 6.1. There are no financial implications relating to this report. 7. Climate Change, Sustainability and Environmental Implications 7.1 There are no Climate Change, Sustainability and Environmental implications relating to this report. 8 Other Implications 8.1. There are no risk or sustainability issues associated with the content of this report. 9. Integrated Impact Assessment and Consultation Requirements 9.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and therefore no impact assessment is required. 9.2. There is also no requirement to undertake any consultation in terms of the information contained in this report. Paul Manning Chief Executive 28 January 2025 134
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Link(s) to Council Values/Priorities/Outcomes Accountable, effective, efficient and transparent Ambitious, self-aware and improving Fair, open and sustainable Previous References None List of Background Papers Performance and Review Scrutiny Forum meetings – 19 March 2024, 28 May 2024, 27 August 2024, and 19 November 2024. Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Tom Little, Head of Communications and Strategy Ext: 4904 (Tel: 01698 454904) Email: tom.little@southlanarkshire.gov.uk 135
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 18 February 2025 Report by: Executive Director (Finance and Corporate Resources) Subject: Forward Programme for Future Meetings 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] advise members of the forward programme for the meetings of the Risk and Audit Scrutiny Committee to 10 March 2026 invite members to suggest topics for inclusion in the Committee’s forward programme [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- [recs] (1) that the report and the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 10 March 2026, attached as an Appendix to the report, be noted. [1recs] 3. Background 3.1. As part of a range of improvement measures introduced as a result of Audit Scotland’s report on the Audit of Best Value and Community Planning (2009), an Action Plan was prepared. One of the actions was to include, as a standard agenda item, a list of items proposed for consideration at subsequent meetings of this Committee to provide an opportunity for members to inform future agendas. The outline forward programme to 10 March 2026 is attached, for members’ information, as an Appendix to the report. 4. Employee Implications 4.1. There are no employee implications. 5. Financial Implications 5.1. There are no financial implications. 6. Climate Change, Sustainability and Environmental Implications 6.1. There are no Climate Change, Sustainability or Environmental implications in terms of the information contained within this report. 7. Other Implications 7.1. There are no risk implications in terms of the information contained within this report. 10 137
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8. Integrated Impact Assessment and Consultation Arrangements 8.1. The report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no impact assessment is required. 8.2. There was no requirement to undertake any consultation in terms of the information contained in this report. Jackie Taylor Executive Director (Finance and Corporate Resources) 13 January 2025 Link(s) to Council Values/Priorities/Outcomes Accountable, Effective, Efficient and Transparent Previous References Executive Committee 8 July 2009 List of Background Papers Audit Scotland Audit of Best Value and Community Planning Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Elizabeth-Anne McGonigle, Administration Adviser Tel: 0738 5403101 E-mail:- elizabeth-anne.mcgonigle@southlanarkshire.gov.uk 138
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APPENDIX – RASC OUTLINE FORWARD PROGRAMME Meeting Date Item Responsibility 6 May 2025 Internal Audit Activity Report Audit and Compliance Manager 2024 NFI Exercise Audit and Compliance Manager Audit Scotland – Financial Bulletin 2023/2024 Head of Finance (Strategy) Financial Resources Scrutiny Forum Activity Head of Finance (Strategy) 25 June 2025 Internal Audit Assurance Report 2024/2025 Audit and Compliance Manager Annual Governance Statement for 2024/2025 and Significant Governance Areas Quarter 4 Progress Report Audit Scotland: Best Value Thematic Report Head of Administration and Legal Services External Audit Unaudited Annual Accounts 2024/2025 Head of Finance (Strategy) Interim Management Report External Audit Internal Audit Activity Report Audit and Compliance Manager 30 September 2025 External Auditor’s Annual Report to South Lanarkshire Council 2024/2025 External Audit Audited Annual Accounts 2024/2025 Head of Finance (Strategy) Internal Audit Activity Report Audit and Compliance Manager Year End Insured Risks Report 2024/2025 Head of Finance (Transactions) Year End Risk Management Report 2024/2025 and Review of Council’s Top Risks 2025/2026 Head of Finance (Transactions) Fraud Statistics Annual Report 2024/2025 Audit and Compliance Manager 139
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9 December 2025 Internal Audit Activity Report Audit and Compliance Manager Audit Scotland Report: Local Government in Scotland Overview 2024 Head of Communications and Strategy Performance and Review Scrutiny Forum Annual Update Head of Communications and Strategy Good Governance Update Head of Administration and Legal Services 10 March 2026 Internal Audit Activity Report Audit and Compliance Manager 2026/2027 Internal Audit Plan Audit and Compliance Manager Fraud Statistics Six Monthly Update 2025/2026 Audit and Compliance Manager Annual Audit Plan External Audit N.B:- Audit Scotland national studies and reviews will appear as a recurring item but the frequency and subject matter will vary according to their programme. 140