Agenda item

The Committee considered the Internal Audit Progress Report, including progress against the 2025/26 Audit Plan, audits finalised since the last report, ongoing audits, and the follow-up of agreed audit actions.

The Assistant Director - Audit Assurance and the Internal Audit Manager, had attended Council’s Leadership Management Group to further develop understanding of Middlesbrough’s operating context.  Members were informed that the Assistant Director and the Internal Audit Manager had been allocated to the Middlesbrough account.  The internal auditors provided an update on progress against quarter four activity.

Members noted that a few audit reports had been finalised, including those set out at page 59 of the report, with Annex D detailing progress on ongoing audits.  The internal auditors confirmed that most audits were on track to be completed by the next meeting, with only a small number remaining outstanding.

A Member queried whether updates on audits originally due to be finalised in December or January, but scheduled for Committee consideration in April, could be provided earlier at the February Committee meeting.  The internal auditors confirmed this would be possible where reports had been issued, subject to the agreed work programme.  The Head of Policy, Governance and Information advised that this needed to be considered on a case-by-case basis, as some reports may contain operationally sensitive information requiring redaction prior to circulation.  The Committee noted that the report provided assurance that audit activity was progressing.

In relation to the Anti-Social Behaviour Management Audit (page 59), a Member commented that additional detail would have been helpful, particularly regarding performance metrics and if these aligned with the Council’s neighbourhood model.  Officers confirmed that performance metrics were still being developed and that this would be addressed in the final report.  It was noted that the audit opinion of reasonable assurance reflected areas for improvement, and that the report was to address the outcomes of the audit and how the recommendations had been addressed.  This report was due to be presented to the Committee in February 2026.

Members also referred to information contained within Annex B, noting that greater background detail on partnership arrangements would have been useful to aid understanding.  It was acknowledged that some context had not been available at the time of drafting, and that this would be clearer in future reports.

Regarding the Savings Plans and Delivery Audit (page 61), Members were advised that the report had been issued as final and could be circulated to Members.  In relation to Adult Social Care financial assessments (page 60), concern was expressed that progress was difficult to assess, partly due to auditors not having access to all Council systems and competing service priorities impacting timescales.  Members emphasised the importance of earlier escalation where delays occurred, and the value of engaging Officers earlier in the audit process to resolve issues more efficiently.

The Committee discussed the No Recourse to Public Funds Audit, noting that fieldwork was underway and that further updates would be provided at the February meeting.

Members also discussed rising Adult Social Care and Children’s Services costs, highlighting the importance of understanding whether the Council was achieving value for money, including how costs were apportioned with partner organisations such as the NHS.  The internal auditors confirmed that assessments were being undertaken to determine appropriate cost sharing and that this work would inform future planning, including the forthcoming planning cycle linked to deprivation, safeguarding and service demand.  It was noted that this would form part of consultation at the February Committee meeting.

In relation to the follow-up of agreed audit actions (page 66), Members noted that four actions were overdue.  The internal auditors confirmed that two related to domestic abuse monitoring, one of which had been completed, with the other progressing and responses received.  Assurance was provided there were no significant concerns and that the actions were being actively managed.  The internal auditors highlighted that the relatively low number of overdue actions reflected positively on the Council’s overall approach to audit and governance.

The Assistant Director – Corporate Fraud, presented the Counter Fraud Progress Report for 2025/26, providing an update on counter fraud activity including fraud prevention, detection, investigative work and multi-agency collaboration.

The report outlines the significant risk that fraud presents to the public sector and confirmed that the internal auditors continued to provide the Council’s corporate counter fraud service.  This included preventative work, fraud awareness activity, data matching, investigations and recovery of losses.

Members were advised that fraud awareness activity had been undertaken during the year, including targeted communications on cybercrime risks as part of Cybersecurity Awareness Month.  Bespoke fraud training had also been delivered to Revenues, Benefits and Social Care assessment teams.

The Committee noted the Council’s participation in the National Fraud Initiative (NFI), a large-scale data matching exercise overseen by the Public Sector Fraud Authority.  It was advised that results from the 2024/25 NFI exercise were still being reviewed and that supplementary data matching relating to care home residents and direct payment recipients had resumed following changes to legislation. 

In relation to investigative activity, Members were informed that between 1 April and 31 October 2025, 78 referrals of suspected fraud had been logged.  Eleven investigations had been completed, with a further 33 cases under investigation.  Examples of completed cases were provided, including council tax reduction scheme fraud and single person discount fraud, with appropriate sanctions applied and recovery action taken.

Members welcomed the level of investigative activity and the recovery of losses.  Discussion took place around the importance of continuing fraud awareness and prevention work alongside investigation activity, particularly given financial pressures on the Council.

AGREED that:

·        The latest update on the internal audit and counter fraud work was noted.