The fourth in our fortnightly series of guest blog posts focusing on sector specific challenges from an internal audit perspective.
Take a look through the lens of local authorities.
Local authorities are facing a tough and complex set of pressures, including cuts in funding, economic growth challenges and rising demand for services - with increasing costs associated with their provision. Other pressures include loss of revenue from leisure centres, libraries, car parks and other profit streams due to the pandemic compounding existing issues in many regions.
This guest blog post explores the topic from two perspectives.
Whilst there may not be many more Section 114's given the government’s approach of giving capitalisation directives, the uncertainties and, therefore, risks around local authorities future funding through the delayed reviews on business rates retention and fairer funding are very real.
Financial sustainability is the number one priority at board level, although there are many other material challenges on the agenda:
So, what a year 2020 was… but 2021 and beyond looks to bring great things for internal audit and the assurances we provide to the council.
The pandemic has allowed us to learn so many lessons: we must be responsive, we must be agile, and we must flex as the organisation does – which I know we all talked about, but now we have to ensure we are delivering this.
A local authority is an environment where they have to make the very best use of their resources and be clever in their delivery. This is not a new concept, but it has become foremost in our minds. The council is already thinking differently and ensuring that they can respond to unforeseen events to continue to deliver services to their residents.
As internal auditors, the risks associated with this way of working must be factored into the internal audit programme, with planning less focused on a structure and rigid 12-month plan, but a rolling plan with the ability to flex and adapt the work being delivered.
Internal audit has ambitions to report at pace where needed, ensuring that quality assurance can be delivered real time.
The assurance map, which is a challenge to develop and maintain, due to the expanse and ever-changing organisation, needs to be central to the delivery of internal audit. My challenge for this year is to build on this, ensure it is maintained and, therefore, becomes a real resource for both my team but also the wider council.
Working in a virtual world lends itself to this way of working - it’s so much easier to pick up the phone or make an MS Teams call rather than waiting weeks for the next formal meeting. Therefore, the ability to listen and take it all in is now (more than ever) a very necessary skill of an auditor. What with everything moving at such a fast pace and things undoubtedly getting lost in the noise.
If something goes wrong and the question is asked ’where was internal audit?’- my answer cannot be ‘I don’t know because I didn’t hear about it’. I will ensure that my network, and that of my team, is strong and wide-spreading. Internal audit needs to be in the midst of the narrative, not at the end. Internal audit is working hard to ensure that the assurance map, audit delivery and reporting reflect this and enhance the assurance we deliver this year.
Financial foresight – Grant Thornton/CIPFA