Agenda Item No. 13
The Vale of Glamorgan Council
Audit Committee: 21st November 2016
Report of the Head of Finance / Section 151 Officer
Annual Report on Schools 2015/16
Purpose of the Report
To present to Members a copy of the report issued to the Director of Learning and Skills, summarising the findings made by Internal Audit in relation to the school based audits conducted in the 2015/16 audit year.
THAT Members consider the content of the report attached as Appendix A.
Reason for the Recommendation
To keep the Audit Committee informed.
As previously reported to Members, in order to ensure that audit days available are used in the most effective way, changes were made to the school audit programme 2015/16 which allowed for more in depth coverage of high risk areas rather than undertaking cyclical school visits. To do this, all schools were issued with a Control Risk Self-Assessment questionnaire (CRSA) which enabled the schools to self-evaluate the controls they have in place to mitigate risk. In addition an Assurance Statement, which provides assurance that the Head Teacher and Chair of Governors are ensuring that the school has sufficient internal controls in place was requested from all schools. Therefore, the planned audit days for schools (114 days) could be utilised for more in depth reviews based on a robust risk assessment taking into account senior management requirements, previous reports, recent changes in key personnel such as Head Teachers or Clerks or any other concerns brought to Internal Audit's attention.
Relevant Issues and Options
The report presented in Appendix A provides Members with details of the key findings made during 2015/16 but a summary is presented below.
During 2015/16, 58 CRSA's were issued to schools, of which 57 were returned. The completed CRSAs were evaluated by Internal Audit and any issues addressed with the individual school. No common trends or significant issues were identified and the overall control environment was evaluated as good.
Assurance Statements were issued, the purpose of which was for Head teachers and Chairs of Governors to acknowledge their responsibility in maintaining and operating the school in accordance with the Council's procedures and practices that uphold the internal control and assurance framework, and the Fair Funding Scheme for Schools. Only 16 Head teachers and 24 Chairs of Governors completed the Assurance Statement and it was found that some did not understand the form or its significance. In order to improve the response rate, this information as contained within the Assurance Statement and the declaration will be included on the CRSA questionnaire from 2016/17 onwards, which will make the process more efficient.
In 2015/16 over £86 million was delegated to the Authority's Secondary, Primary and Special Schools and of the 59 schools operating at year end, three were in deficit with a value of £215,561. Of the 56 schools in surplus, 21 had surpluses that, under School Funding (Wales) Regulations 2010, are regarded as excessive and the authority may direct a governing body on how balances in excess of these limits may be spent or they can be clawed back. Although the Council has a policy whereby claw back can be exercised this has not been applied. These schools have been requested to submit robust plans of how the balances will be spent which will be monitored by the Education Finance team.
During the year some specific risk based audits were undertaken which are detailed in Appendix A. Of the 8 pieces of work, 2 did not warrant an audit opinion due to the nature of the work, one was a grant claim and the other was advice and guidance regarding financial systems. Of the remaining 6 audits, 4 were given an audit opinion of reasonable and 2 were given limited assurance. Limited assurance reports are followed up within 3 months to ensure improvements have been made and both areas identified at Appendix A have now been revisited and improvements to the control environment have been made, hence reasonable assurance has now been provided to both.
Therefore, during 2015/16 it was found that the move away from cyclical school audit visits has proved a success in ensuring that the Internal Audit resource is targeted effectively to those areas where they are most needed. A total of 94.5 days of the 114 days allocated were used. Certain control weaknesses were identified during the year and appropriate recommendations made and accepted. Overall it was concluded that the control environment within schools was good.
Resource Implications (Financial and Employment)
None as a direct consequence of this report.
Sustainability and Climate Change Implications
None directly from this report.
Legal Implications (to Include Human Rights Implications)
Providing of an adequate and effective Internal Audit function is a legal requirement under the Accounts and Audit (Wales) Regulations 2014 amended from time to time.
Crime and Disorder Implications
Pursuing initiatives to prevent, detect and deter crime is encompassed within the terms of reference under which the audit function operates.
Equal Opportunities Implications (to include Welsh Language issues)
None as a direct consequence of this report.
The work of audit is intended to assist in the achievement of all corporate and service objectives.
Policy Framework and Budget
The proposals in this report are in accordance with the policy framework and budget.
Consultation (including Ward Member Consultation)
No further consultation is proposed.
Relevant Scrutiny Committee
Learning and Culture
Helen Smith - Operational Manager - Audit
Tel: 01656 754901
Carys Lord - Head of Finance / Section 151 Officer