Agenda item

Report of the Group Chief Internal Auditor.

The Committee received a report of the Group Chief Internal Auditor updating Members on the Internal Audit activity between 1 July 2025 and 30 September 2025.

The following questions were raised during discussion:

a)    A Member requested further information regarding the Internal Audit review of consultancy use. The Member noted that the reported range of £20m–£60m in 2024/25 was significant and observed that this linked to the recommendations made. He also noted that management actions were scheduled for completion by October with a follow-up in November and asked for an update on progress. The Group Chief Internal Auditor confirmed that of the three recommendations made, one had been fully implemented, and progress was being made on the remaining two. He advised that the recommendation relating to the chart of accounts was well advanced and linked to the implementation of the new SAP system and transition to the new ERP platform.

b)    A Member requested clarification on whether a system existed to map consultancy expenditure against internal resources and asked if a skills audit had been undertaken to identify gaps between consultancy provision and in-house capability. The Member queried whether in cases of capacity issues, there was a process for internal training. The Chamberlain explained that the ability to address this effectively required foundational data on roles and responsibilities across the organisation, which would be available through the new SAP system.

c)    The Chief People Officer advised that a strategic workforce planning role would form part of the HR transformation and would be introduced as part of the recruitment drive. He emphasised the importance of data in shaping future workforce planning and confirmed that HR business partners were working to identify the nature of activities undertaken, the skills required, and the most appropriate resourcing approach. Using data would enable informed decisions, such as appointing permanent staff for projects exceeding two years or engaging fixed-term contractors for shorter projects. He also referred to Ambition 2025 and the development of a career framework, explaining that HR was mapping “job families” across the organisation to provide better intelligence.

d)    The Deputy Chair raised concern regarding overdue actions, particularly where some red-rated actions had been outstanding for over a year. Attention was drawn to fire safety at the Barbican and the recent audit, and the Deputy Chair questioned whether these matters should be referred back to the relevant service committees. In response, the Group Chief Internal Auditor confirmed that follow-up work had been undertaken on the fire safety audit and that the team had revisited the Barbican on more than one occasion to review progress in implementing the recommendations. He advised that the next step would be escalation, which would be carried out through the new Insight Report format to the appropriate service committee, and confirmed that this process would take place shortly.

e)    A Member emphasised the importance of the work and systems being implemented and requested that the Committee receive a report in six months’ time capturing progress, identifying any additional risks, and highlighting which mitigations were effective and which were not. The Chief People Officer agreed.

A discussion took place regarding the Internal Audit review on the use of consultants, with particular reference to IR35 compliance. The Group Chief Internal Auditor explained that there was a clear link between consultancy engagements and IR35 requirements, and that due diligence was being undertaken.

The Chairman expressed concern regarding overdue, red-rated recommendations, noting that some implementation target dates dated back to 2024. He requested that the report be amended to include revised dates for all outstanding recommendations together with a summary of the actions taken to address them. The Chairman further requested that the Chairs of the relevant service committees be contacted and confirmed that, should any recommendations remain overdue three months from now, he would invite those Chairs to attend this Committee.

In response, the Chamberlain confirmed that, since publication of the report, further follow-up work had been undertaken and most of the six overdue recommendations for the Chamberlain’s department had now been addressed. The Group Chief Internal Auditor added that some work remained outstanding and that discussions were ongoing regarding three revised recommendations, which would reflect the actions taken to date. He advised that recommendations had been reviewed and recast to address the remaining issues, with revised timescales agreed.

The Chairman requested that the Group Chief Internal Auditor send an update to Members in 6 weeks via email regarding the progress on the overdue recommendations. 

RESOLVED – That the report be noted.