Agenda item

Report of the Head of Internal Audit.

The Committee received a report of the Head of Internal Audit concerning the Head of Internal Audit’s opinion on the internal control environment, governance arrangements, and risk management processes within the City of London Corporation.

The following points were noted:

• In response to a question about internal control weaknesses, officers clarified that the control environment’s design remains robust. Most issues relate to inconsistent application, though there is a growing concern around the design of second-line assurance activities—particularly in procurement, where increased delegation has reduced scrutiny.
• A Member inquired about access to specialist audit skills. Officers explained that the team uses the framework (hosted by London Borough of Croydon) with a small budget available for additional third-party expertise if needed.
• A Member raised a question about whether compliance issues stem from cultural factors. Officers suggested that non-compliance often arises from staff trying to expedite processes or lacking familiarity with procedures, especially in procurement. They emphasised the need for better support and training rather than attributing issues to negative culture.
• The discussion highlighted the importance of focusing audit resources on high-risk areas and training staff. There was agreement that while urgent needs arise, maintaining value for money and procedural discipline is essential.
• In response to a question raised about the independence of internal audit. Officers confirmed that there have been no instances where independence was compromised or challenged during the past year.

RESOLVED – That, the report be noted.